Can I keep state and federal tax refunds under chapter 13? 25 Answers as of February 18, 2014

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The Law Offices of Katie M. Stone
The Law Offices of Katie M. Stone | Katie M. Stone
You must turn a copy of your tax return and the check from the IRS (you must request a check and not direct deposit) over to your chapter 13 trustee each year you are in your bankruptcy. They will send you back any portion that is exempt. If you are paying 100% of your chapter 13 plan, you can keep your return. I hope you found this answer useful.
Answer Applies to: Florida
Replied: 2/18/2014
Indianapolis Bankruptcy Law Office of Eric C. Lewis
Indianapolis Bankruptcy Law Office of Eric C. Lewis | Eric Lewis
The answer to your question depends entirely on your Chapter 13 plan, as proposed and confirmed. Some debts can keep tax refunds under certain circumstances, in whole or in part, and others cannot.
Answer Applies to: Indiana
Replied: 2/14/2014
Stephens Gourley & Bywater | David A. Stephens
Depends upon your plan, but usually you cannot.
Answer Applies to: Nevada
Replied: 2/7/2014
Law Offices of A. J. Mitchell, LLC
Law Offices of A. J. Mitchell, LLC | A. J. Mitchell
You are required to forward all Federal tax refunds to the Chapter 13 Trustee during the period of your bankruptcy. If you should have a compelling need to use or keep any of your tax refunds, you must file a Motion to Retain Funds with the Bankruptcy Court and attend a hearing relative to same.
Answer Applies to: Georgia
Replied: 2/5/2014
Stuart P Gelberg
Stuart P Gelberg | Stuart P Gelberg
That is a matter of local practice. Generally no unless you're paying unsecured creditors in full.
Answer Applies to: New York
Replied: 2/5/2014
    GARCIA & GONZALES, P.C.
    GARCIA & GONZALES, P.C. | Richard N. Gonzales
    Yes and no. If you filed your BK earlier this year and received your refund after you filed, your attorney will have to reconcile this in the Chapter 13 plan analysis (you end up paying a portion of the refund you are not allowed to keep to the Chapter 13 Trustee for the benefit of your creditors). Earned Income Credit and Child Tax Credit can not be touched by the Trustee, so these amounts you can keep with no adverse affect.
    Answer Applies to: Colorado
    Replied: 2/5/2014
    Goldsmith & Guymon
    Goldsmith & Guymon | Marjorie Guymon
    No. They are contributed to your plan, in addition to your monthly payments.
    Answer Applies to: Nevada
    Replied: 2/5/2014
    Moore Taylor Law Firm, P.A.
    Moore Taylor Law Firm, P.A. | Jane Downey
    Usually you can unless the trustee requests them. Obviously you aren't withholding enough if you are getting a refund.
    Answer Applies to: South Carolina
    Replied: 2/5/2014
    Kirby G. Moss PC | Kirby G. Moss
    Take a look at your Plan as it should state specifically whether you can or not. Basically, if you have committed to paying 100% of unsecured claims filed in your bankruptcy, you can likely keep refunds. If you haven't so committed, you can't. Check with your attorney if questions.
    Answer Applies to: Indiana
    Replied: 2/5/2014
    Janet A. Lawson Bankruptcy Attorney
    Janet A. Lawson Bankruptcy Attorney | Janet Lawson
    Most likely not, especially if it a confirmed case. Look at the confirmation order. If you are going to file now, get the refund first.
    Answer Applies to: California
    Replied: 2/5/2014
    The Orantes Law Firm
    The Orantes Law Firm | Giovanni Orantes
    It depends. Most confirmation orders require you to contribute the refunds to your Chapter 13 plan if your plan pays your creditors less than 100% of their debt. Cases with plans paying much less than 100% of the unsecured debt represent over 90% of my clients' cases (i.e., very few pay 100%) and most actually pay 0%. However, some judges in the Central District simply do not require that you contribute your tax refunds. You should look at your confirmation order to see if it is required in your particular case and confirm with your counsel. Regardless of that, though, there are perfectly proper and legal ways to keep the amounts that would be refunded to you by planning properly and amending your W4 forms ahead of time.
    Answer Applies to: California
    Replied: 2/5/2014
    Bird & VanDyke, Inc.
    Bird & VanDyke, Inc. | David VanDyke
    In a chapter 7 you must first exempt the tax refund to keep it. In a chapter 13 unless you adjusted your net income to reflect the correct amount of tax withholding (so that at the end of the year your tax liability is even) you will lose the tax refund.
    Answer Applies to: California
    Replied: 2/5/2014
    A Fresh Start
    A Fresh Start | Dorothy G Bunce
    Not unless you have found an exemption that covers these assets and your plan doesn't say that you are required to turn them over. However, every chapter 13 plan that I see does require the tax refunds to be paid into the plan to be used towards paying unsecured debts.
    Answer Applies to: Nevada
    Replied: 2/5/2014
    Law Office of Shawn N. Wright | Shawn N. Wright
    I'm not sure where you reside, but I am responding as to Pennsylvania bankruptcy exemption laws. I have filed hundreds of Chapter 13 cases in Western Pennsylvania and have never had a client be required to surrender their refunds. One thing however is that some people over-withhold. In other words, I've seen people with 4 or 5 kids who have a W-9 in which they have claimed 0 exemptions. Therefore, their employer is withholding far in excess of what they really owe in taxes. I have seen the Chapter 13 Trustee ask the filer to amend their W-9 in order to reflect their correct net income. By doing this, the employee will have more net income, and could theoretically pay more to their unsecured creditors.
    Answer Applies to: Pennsylvania
    Replied: 2/5/2014
    Law Offices of Marc Weinberg | Marc Weinberg
    My experience has been the Trustee will want you to turn over the refund, unless you have a compelling reason what it should not be turned over.
    Answer Applies to: California
    Replied: 2/5/2014
    Deborah F Bowinski, Attorney & Counselor at Law | Debby Bowinski
    It depends upon the language in your plan and the practices in your jurisdiction. Check with your lawyer!
    Answer Applies to: Colorado
    Replied: 2/5/2014
    Law Office of Jeffrey Solomon
    Law Office of Jeffrey Solomon | Jeffrey Solomon
    Chapter 13 bankruptcies last from 3-5 years. The issue of each year's tax refund depends on where you are located. Different chapter 13 trustees have different practices on how refunds received during the plan are treated. Sometimes the issue is just whether the refund is larger then the refund in the year prior to filing. This issue should be discussed with your local attorney.
    Answer Applies to: Florida
    Replied: 2/5/2014
    Idaho Bankruptcy Law | Paul Ross
    Generally, in Idaho, no. They usually must be turned over to the Trustee.
    Answer Applies to: Idaho
    Replied: 2/5/2014
    Garner Law Office
    Garner Law Office | Daniel Garner
    Not unless you have exempted them somehow. Usually a debtor forecasts the next tax refunds s/he is expecting to receive and lists them as a potential asset on Schedule B and applies as much exemption as possible on Schedule C. The Chapter 13 trustees in Oregon allow you to exempt the federal Earned Income Credit on a continuing basis in your Plan, and if you have appropriate documentation, you can set aside an additional amount every year from your tax refunds. You can exempt refunds on an ad hoc basis if emergencies arise but that requires filing an amended plan which must be served on all your creditors, so it is not a simple process. You should not attempt a Chapter 13 without a lawyer unless you are prepared to deal with all the paperwork and approvals for 3 to 5 years.
    Answer Applies to: Oregon
    Replied: 2/5/2014
    Resnick & Moss, P.C.
    Resnick & Moss, P.C. | Mark Bredow
    Every case is different, whether or not you have to turn over your tax refund will depend upon how much of your debt your plan will pay, and will depend upon other factors. The terms of your plan will determine your responsibilities. But generally speaking, the Chapter 13 Trustee will want you to turn over your federal tax return and does not usually seek your state or local refunds. You should consider changing the amount of the tax exemptions that you claim and reduce the amount of your refund that you expect to receive.
    Answer Applies to: Michigan
    Replied: 2/5/2014
    Bushhorn Law Offices | Thomas D. Bushhorn, Esq.
    Depending upon your financial situation and the amount (dividend) being repaid to your creditors in a Chapter 13 and depending upon the district your case is filed will determine wether turn over of the tax refund would be necessary. It is?a good idea to check with your income tax preparer to see whether reducing your claimed exemptions on your returns would reduce your tax refund entitlement.
    Answer Applies to: Indiana
    Replied: 2/5/2014
    Law Office of Michael Johnson
    Law Office of Michael Johnson | Michael Johnson
    In a ch13 you will keep it need to actually look at facts for a ch 7.
    Answer Applies to: Florida
    Replied: 2/5/2014
    The Law Office of Darren Aronow, PC
    The Law Office of Darren Aronow, PC | Darren Aronow
    If you are paying a 100% plan, then yes.
    Answer Applies to: New York
    Replied: 2/5/2014
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