My question involves bankruptcy in the state of Arizona.
I filed in Oct 2005 and have 3 or 4 more monthly payments left to complete. I have paid each monthly payment a full week ahead of due date. Now, I can hardly believe what is happening. I got a letter from the Trustee stating that I owe them $748 in back taxes(refunds).

As for the back taxes the Trustee claims are due, here is how the Trustee states it: "State Taxes OWED AND PAID by me CANNOT BE DEDUCTED from tax refunds due to the Trustee"

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2005 Federal REFUND=$1190
2005 AZ State OWED AND PAID=$431
I paid the Trustee the difference which was $759.
Trustee says I owe him the AZ taxes of $431!!!

2006 Federal REFUND=$451
2006 AZ State OWED AND PAID=$317
I paid the Trustee the difference which was $134.
Trustee says I owe him the AZ taxes of $317!!!

2007 Federal REFUND=$0.00.......OWED AND PAID $33
2007 AZ State OWED AND PAID=$317
I paid the Trustee nothing because I didn't receive anything.

So as I stated, the Trustee sends me a letter stating that I cannot deduct the amount I OWED AND PAID for AZ State Taxes and that I have 30 days to pay the $748 or my case will be discharged!!

Is this a written law or is this guy just making this stuff up as he goes???
My lawyer first told me that the deduction of State Taxes Owed was acceptable. Now, he tells me the Trustee is CORRECT and he's SORRY!!
I called him again about this and now he tells me he will discuss with the Trustee. So, in the meantime, I have only a few weeks to scrape up $748. Something is terribly wrong here. Can anyone with some real legal knowledge on this help me out. Please.