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  1. #1
    Join Date
    Nov 2005
    Location
    Florida
    Posts
    2

    Default Automatic Stay and Contempt of Court by a Creditor

    :?: I filed Chapter 7 Pro Se on Oct 7, 2005 and after my 341 meeting on 11/21/05 the trustee stated no distribution and all property listed was exempt.
    I notified HQ AAFES bankruptcy department on same date as filing. They responded and I was told if they received my income tax refund it would be sent to me.
    I filed for my 2004 income tax refund on Oct 17, 2005. On Oct 28 my tax refund was sent to HQ AAFES. On Nov 15, I asked AAFES when I would recive my refund since I had listed it on my pettion as an asset and I needed to let my trustee know of the status. A major portion of this tax refund is Earned Income Tax credit
    I was then told by another individual at AAFES that they were requesting automatic stay be lifted. I have not recived any documents form AAFES or the court nor have any showed up as being filed in PACER requesting tha the stay be lifted. Can they keep this refund or are they in contempt of automatic stay? The AAFES rep told me they were not in contempt. I could not find anything that states AAFES does not have to abide by the automatic stay. Should I file some sort of motion? Any advice would be appreciated.

  2. #2
    Join Date
    Sep 2005
    Location
    Behind a Desk
    Posts
    98,846

    Default Tax Refund & Automatic Stay

    If they are charging you for services you hired them to perform after you filed for bankruptcy, your obligation to pay for those services is not going to be discharged by your prior filing. If they are in receipt of the check, you may wish to consult the trustee about recovering the check. If not, there is no apparent reason why they can't seek to have the stay lifted such that they can be compensated for the post-bankruptcy services you hired them to perform.

  3. #3
    Join Date
    Nov 2005
    Location
    Florida
    Posts
    2

    Default

    I did notify my trustee at the 341 hearing and he determined that the refund is exempt. AAFES did not perform any services for me. The debt is an unsecured debt written off 4 years ago. It is for merchandise purchased at a military exchange. It was transferred to HQ AAFES for collection. I thought all collection activity was to cease on Oct 12, 05 the date of filing for bankruptcy. I was just wondering if automatic stay was violated.

  4. #4
    Join Date
    Mar 2005
    Location
    Michigan
    Posts
    28,906

    Default AAFES and IRS - Tax Refund

    I think the issues you are raising were addressed in this case (PDF format) from the Bankruptcy Court for the Northern District of Texas:
    Quote Quoting In re Shortt
    All requirements for setoff under section 553 of the Bankruptcy Code are satisfied here. AAFES has a valid non-bankruptcy right of setoff that section 553 preserved. AAFES and the IRS are the same entity for purposes of setoff.
    (That would not be a binding precedent in California; but the same laws are implicated.)

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