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  1. #6
    Almosthome Guest

    Default Re: Tax Refund

    Quote Quoting grandmadebb
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    The letter says we are required to fund our confirmed plan with all our disposable income. Since the trustee deems the refund as disposable income and above the net monthly income on our schedules, he says he will distribute the money to our unsecured creditors. He also states, the refund cannot be used against our monthly payment, it is in addition to our monthly payment.

    This is direct from Doug Neway, the new trustee in Jacksonville, FL. Mamie Davis the previous trustee never asked for our tax return or refund. According to our attorney, this has been the law, but we were never told when filing our b/k that our refund would be required to be turned over, if so, we would have claimed more dependents. We only have a return this year because our business lost money.
    Okay I see. And I think the trustee is right (and maybe that is why there's a new trustee) but I would have to research what "disposable income" is under the BK code. Sounds like it was the law but never enforced by the prior trustee - again, I would have to look at the BK code and the cases under it. It may be worth while to do so yourself. There could be a basis to fight it.

    If you look at it from his perspective - that refund is money that was withheld from your paychecks in anticipation of what your tax would be. If you did not get a big refund, you would have received that money every 2 weeks over the year rather than all at once now which would have been disposable income. Had you claimed more allowances on your W-4 (I think that's what you mean), less would have been withheld and that would have been paid to you in your paycheck. Of course, when you get it in a paycheck it spends a lot quicker than if you save it up via a overwithheld tax payment. Oh well. Up your allowances this year.
    Keep in mind the trustee's job is to get as much for the creditors as he reasonably possible can AND he gets commission on what he pays out so you can see where his motivations are.

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