What we can argue on our behalf regarding Chapter 13 Bankruptcy taxes owed and refund? 7 Answers as of May 17, 2016

We're currently in Chapter 13 bankruptcy and our taxes show a $1000 owed in federal taxes but a $1500 refund from the state. We understand the trustee has the right to any refund but it would seem fair they should just get the $500 difference versus us having to pay the $1000 and them taking the full refund.

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Ronald K. Nims LLC | Ronald K. Nims
The trustees in my area don't take any refund less than $2,000. The reason they are taking the refund is that it represents excess money over what is in your plan. Since you have a liability at the same time, you have a strong argument that the trustee should get only the net amount. Your attorney should have told you to cut your withholding for your paychecks to avoid this.
Answer Applies to: Ohio
Replied: 5/17/2016
Richard B. Jacobson & Associates, LLC | Richard B. Jacobson
Retaining a skilled BR lawyer is almost always worth the expense. You certainly would benefit. Your point is a good one but it appears inconsistent with the Bankruptcy Code. After all, 'taxes' may appear to be much the same thing no matter which government is the claimant, but for BR, the state and federal taxing authorities are two different creditors, and there is no right for the debtor to net them out. It would likely be different if a single state or federal government had two claims for different years. and you were entitled to a refund for one of the years.
Answer Applies to: Wisconsin
Replied: 5/17/2016
Stephens Gourley & Bywater | David A. Stephens
You can argue that, but in Nevada that argument is likely to fall on deaf ears.
Answer Applies to: Nevada
Replied: 5/16/2016
Janet A. Lawson Bankruptcy Attorney
Janet A. Lawson Bankruptcy Attorney | Janet Lawson
They only get the surplus $500.00.
Answer Applies to: California
Replied: 5/16/2016
A Fresh Start
A Fresh Start | Dorothy G Bunce
No one ever said Chapter 13 would be fair. Since the taxes are separate obligations, I cannot see the trustee buying this argument, but you are welcome to ask.
Answer Applies to: Nevada
Replied: 5/16/2016
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