If I am currently in a Chapter 13, how can I keep my tax refund? 18 Answers as of February 28, 2014

I recently filed for a chapter 13 bankruptcy in October 2013. How may I be able to keep my tax refund? They told me I had to submit it over to the trustee.

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Law Office of Michael Johnson
Law Office of Michael Johnson | Michael Johnson
In Chapter 13 Trustee does not take Tax refund. You need to file your return with the trustee to see if you are making more income.
Answer Applies to: Florida
Replied: 2/28/2014
Stuart P Gelberg
Stuart P Gelberg | Stuart P Gelberg
If your plan does not pay 100% to unsecured creditors it is routine to require all tax refunds during the plan to go to the trustee. You need to read your plan and confirmation order
Answer Applies to: New York
Replied: 2/28/2014
Stephens Gourley & Bywater | David A. Stephens
You probably cannot keep the refund unless your plan is confirmed and allows you to keep it.
Answer Applies to: Nevada
Replied: 2/28/2014
GARCIA & GONZALES, P.C.
GARCIA & GONZALES, P.C. | Richard N. Gonzales
In a Chapter 13 you will have to pay a portion of your tax refund to the creditors through your Chapter 13 plan. For example, if you received a $2,000 refund for 2013, and you filed your BK on November 1st, then 10/12's of your refund would have to be paid to your creditors over the life of the plan. You can exclude any portion of the refund attributable to earned income credit or child tax credit (creditors can not touch this portion of the refund). But this has nothing to do with turning over your income tax refund check to the Chapter 13 Trustee.
Answer Applies to: Colorado
Replied: 2/28/2014
Idaho Bankruptcy Law | Paul Ross
It depends on each district. In Idaho, unless the Court grants otherwise, tax refunds must be turned over to the Ch 13 Trustee. If you have an unexpected expense, sometimes you can work with your Trustee to cover a portion of that, but that depends on your Trustee.
Answer Applies to: Idaho
Replied: 2/28/2014
    Law Office of Lynnmarie A. Johnson
    Law Office of Lynnmarie A. Johnson | Lynnmarie Johnson
    It depends on how your Plan is set up. If the trustee told you that you had to turn your refund over, you probably have to, but check with your attorney first!
    Answer Applies to: Michigan
    Replied: 2/27/2014
    Garner Law Office
    Garner Law Office | Daniel Garner
    If you have necessary expenses that are not provided for in the current budget you have filed on Schedule J, then you can file an amended plan that states the details of what you are using the refund for. Since amending your plan requires sending a copy out to all creditors, it is advisable to review it with the trustee's office first to make sure they have no objections or to address them beforehand. Then you have to send out the amended plan to all your creditors and file an amended Order Confirming Plan for the court to sign around the end of the 30-day review period, as long as no creditors have objected. If you do get an objection, you will have to attend a hearing unless you can resolve the objection by direct negotiation with the objecting party. Obviously, this is not a process for the faint of heart, but it can be done. The reason for all this is that tax refunds normally get paid to the trustee and distributed to creditors, so your keeping the refund comes at the expense of your creditors.
    Answer Applies to: Oregon
    Replied: 2/27/2014
    The Law Office of Mark J. Markus
    The Law Office of Mark J. Markus | Mark Markus
    The way to keep the refund is to properly schedule the asset and then exempt it. You would likely only be able to exempt 5/6 of it since you filed your case in October. This assumes you have exemptions available to cover the amount of the refund. Your attorney will know how to handle all that. If you don't have an attorney, you're finding out one of the many reasons why one is necessary.
    Answer Applies to: California
    Replied: 2/27/2014
    A Fresh Start
    A Fresh Start | Dorothy G Bunce
    You can keep your tax refund if you claimed it as exempt on Schedule C. However, most Chapter 13 Plans require you to surrender your tax refund every year. If you have a pressing need to keep the refund and it isn't exempt, the court may okay you doing this on the condition that you repay this money down the road.
    Answer Applies to: Nevada
    Replied: 2/27/2014
    Law Offices of Eric W. I. Anglin
    Law Offices of Eric W. I. Anglin | Eric W. I. Anglin
    If the trustee requires you to turn over your tax refund then you must do so or you risk possible dismissal of your case.
    Answer Applies to: Indiana
    Replied: 2/27/2014
    Janet A. Lawson Bankruptcy Attorney
    Janet A. Lawson Bankruptcy Attorney | Janet Lawson
    No getting around this. Modify your deductions so you don't have a refund next year.
    Answer Applies to: California
    Replied: 2/27/2014
    Goldsmith & Guymon
    Goldsmith & Guymon | Marjorie Guymon
    You can't. IF you have some extenuating circumstances you can negotiate with the trustee to keep a portion or all of it in order to accommodate the unforeseen expense, but that's about it.
    Answer Applies to: Nevada
    Replied: 2/27/2014
    Barr, Jones & Associates LLP
    Barr, Jones & Associates LLP | Andrew Brasse
    I would talk to your attorney. Every jurisdiction is a little different. You should be able to retain at least part of it.
    Answer Applies to: Ohio
    Replied: 2/27/2014
    The Law Office of Darren Aronow, PC
    The Law Office of Darren Aronow, PC | Darren Aronow
    If you are in a 100% payment plan to trustee then you can keep it, if not, then it goes to the trustee
    Answer Applies to: New York
    Replied: 2/27/2014
    Tokarska Law Center
    Tokarska Law Center | Kathryn U. Tokarska
    If the Plan you signed or the Pre-Confirmation Modification Form states that your income tax refund is to be turned over to the Trustee then that is what was agreed and such refund needs to be turned over unless you are successful in an attempt to modify the Plan. To see if the Court will allow a modification of the Plan you would need to file a motion and show that either of the following has happened since the confirmation of the Plan : 1) income has decreased 2) "reasonable and necessary" expenses have increased or 3) a combination of 1 & 2. I tell my clients to track their spending and compare what they earn and spend against Schedules I and J. If reality doesn't match up with Schedule I & J, debtors could be heading for trouble. If you have insufficient funds to cover certain living expenses it could be that you are actually spending more in one or more of the categories of expenses listed in Schedule J, which causes you to be short in another one or more category. Understand that if your particular Plan provides 0% to unsecured creditors then there is no wiggle room to adjust the payment unless the Plan payment also includes secured debt obligations and you are willing to surrender the collateral. You need to follow up with your attorney to see if a modification is possible. Kathryn U. Tokarska Attorney at Law TOKARSKA LAW CENTER, 185 WEST "F" STREET, SUITE 100, SAN DIEGO, CA 92101 PHONE: (619) 285-1992, FAX: (866) 924-5829, WWW.SDBANKRUPT.COM Tokarska Law Center is a Debt Relief Agency. We assist persons and companies with financial problems by filing for Bankruptcy under the U.S. Bankruptcy Code.
    Answer Applies to: California
    Replied: 2/27/2014
    Deborah F Bowinski, Attorney & Counselor at Law | Debby Bowinski
    If "they" told you you must turn your refund over to the trustee then you will probably have to do so. But if you filed a chapter 13 then you should have a lawyer and all your questions should be addressed to him or her. Only your lawyer has sufficient information about your circumstances, your plan, your trustee, and the practice in your jurisdiction to be able o adequately answer your questions.
    Answer Applies to: Colorado
    Replied: 2/27/2014
    Detroit Lawyers, PLLC
    Detroit Lawyers, PLLC | Nick Best
    In order to keep your tax refund in a Chapter 13 bankruptcy, you must submit a Plan Modification excusing you from remitting your 2013 income tax refund into your Chapter 13 Plan. The modification should outline the unanticipated expenses for which you need the refund for, the expected amount of the refund and the impact of the Plan Modification on the classes of creditors in your plan.
    Answer Applies to: Michigan
    Replied: 2/27/2014
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