Tax Refund During Bankrutpcy
Chapter 13 plan was confirmed in 5/05. This is the first year the new trustee has asked. by letter, to supply a copy of return and refund. If we don't comply, what can happen? Also, most of our debt was back taxes, I am considering asking the IRS to apply the refund to taxes owed and then attempt to get the over payment back once our plan is finished. Any advice?
Re: Tax Refund During Bankrutpcy
Thanks I'll look up disposable income, so........with all this being said, if we choose to not turn over our refund, by the way the letter came regular mail, not certified, can we go to jail?
Re: Tax Refund During Bankrutpcy
Quote:
Quoting
grandmadebb
Thanks I'll look up disposable income, so........with all this being said, if we choose to not turn over our refund, by the way the letter came regular mail, not certified, can we go to jail?
Yes, you can go to jail.
But seriously, the trustee would either move to turn over the funds to him or to dismiss your case. If your case is dismissed it's as if the case was never filed (with the exception of the tolling of the statutes of limitation for your debts) so you do not want that to happen.
As for no certified mail - so what? Certified schmertified. I have seen many people ignore things because there was not some certified letter sent only to later regret it. Guess what? The law presumes that mail sent is mail delivered. Your address is filed under oath with the court when you filed your bankruptcy petition. If it's mailed there, unless you filed a notice of change of address, it is presumed that you received it and read it.
I looked at a few cases regarding tax-refunds and whether they are property of the estate. The answer is not clear and again, the plan or confirming order must be the first place to look. If it is not addressed there, then further inquiry should be made. There are two cases from Ga which are not controlling in Florida but are in the same federal district (11th) both of which suggest that the tax refund belongs to you and not the trustee/creditors. The cases are: In re McCray, 172 B.R. 154 (BK S.D. Ga, 1994), and Matter of Gonzalez, 42 B.R. 401 (BK NDGA, 1984).