Jump to content

Tax Refund Check and Trustee?


LTrain823
 Share

Recommended Posts

Hello everyone, I hope all is well! I have asked this question before but I now have a bit of a twist to it.

My CPA finally put my taxes together and she said I am expected to ge $11,000 back this year in taxes!!! WOOOHOOO

A lot of this is because of my income, I bought a house in June, and fell in the homestead bracket in Michigan for property taxes.

Anywho, my atty assures me that the trustee will not touch it because I have little or no equity on my home, a fairly new car, etc. I guess she said that there are certain exemptions but I am not educated in this field at all.

I am hoping to get some mixed feedback. I'm sure there is someone out there that is going to give me the rulebook speech but I was hoping to also get a "friend to friend" advice from someone who had a similar expierience than I have. I plan on filing 13. I do not plan on spending this money anytime soon, I was actually planning on cashing it and putting it in a safety deposit box or something of that matter. I was hoping to get married within the next couple of years and this money would be put aside for any expenses that I'm sure would occur (ring, dress, wedding, honeymoon, etc.). I know when times are tough you are supposed to make all the sacrifices but I want to give her the best that I can and I know she will be understanding if I cant give her the wedding of her dreams but I would still like to make it as memorable as I can.

I just sent the tax forms today and I would expect to get the check within a month or two. I'm not going to get a state check because I owe the state taxes and my CPA said they are going to take it anyway.

My atty said to get the check and cash it before you file. My question is, has anyone went to a 341 meeting and had the trustee drill you with questions? I really dont want to feel uncomfortable going into this and I dont want to feel guilty either but I hope some of you understand my situation. Has anyone dealt with the Michigan trustee? I'm really nervous about this and I was just hoping to get a blessing of good news. Thank you for listening and I hope to one day return the favor with positive news.

Link to comment
Share on other sites

Yes. You will have to show them your tax returns. Your trustee, most likely, will ask you where the refund money went to.

Now, from personal experience. I took a $5000 cash advance from my AmEx and then filed BK7 a few months thereafter. Keep in mind the rules were different before 2005 (mine was in late 2004). Even before any 341, the trustee contacted my attorney and wanted three years of tax returns, three years of bank statements, and wanted a written statement as to where the money went. My shadeball attorney wrote to the trustee on my behalf and claimed it all went to "personal expenses". I'm not sure that would fly under the new tightened post 2005 rules. It actually went to pay off a family member that I owed money to. Little did I know then that I was making a preferential payment and was essentially lying to the trustee (I followed my attorney's advice to a tee). And btw- my case was so bungled that I never even had a 341- so maybe they would have sniffed it out had they had it (I was out of the country and my attorney didn't show either, yet I received discharge papers 6 weeks after).

Keep that in mind if/when the money "disappears". $11,000 is nothing to sneeze at. The trustee would be negligent if they didn't ry to trace it. They are, in a sense, working to recover for the creditors.

Link to comment
Share on other sites

Be careful, that last post sounds like a botched bankruptcy case that slipped through, it is not the norm. In Chapter 7 all assets and debts are frozen the day you filed. If you already have the refund great pay off some of your debts without preference to any one creditor. If you file and the refund is owed to you it is now property of the bankruptcy estate unless you have enough exemptions to cover it. In Chapter 13 most districts require that after confirmation of the plan all refunds go directly to the trustee.

Link to comment
Share on other sites

  • 2 weeks later...
Guest
This topic is now closed to further replies.
 Share

×
×
  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.. For more information, please see our Privacy Policy and Terms of Use.