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How can I find out if trustee is attempting to intercept a tax refund?

Warren, MI |

I filed for bankruptcy on 10-19-2010. In my origional schedules I did not list my anticipated tax refund. I found out about pacer on december 17th. I logged on and saw that in the trustees initial report she wrote that she was pursuing my tax refund. On january 6th I amended my schedules B&C to include and exempt 5500 dollars for a anticipated refund. I did not serve the trustee but I called the clerk and she said I didn't need to. I now know my refund will be 5200. My case was discharged on 1-10-11. I called the trustee on the jan. 17th to ask if she was still pursuing my refund and she said she was. As of today 4-14-2011 my case is not closed. There are no avoidance actions on pacer or objections. Can she still take the refund? Would a tax intercept be on pacer under my case?

I have not filed my taxes yet, but need to.

Attorney Answers 3


  1. Best answer

    When you amended schedule C, the trustee would have received notice by means of the ECF (electronic case filing) system. The trustee had 30 days to object to the amended exemption, and apparently did not. Therefore, the tax refund should be exempt.

    A tax intercept would not be on PACER.

    Technically, the refund would still be property of the estate and the trustee is entitled to collect it, but if it is exempt the trustee will be required to pay it to you.

    Not having examined the documents in your case, I am not certain that your amended schedules B and C were properly filed. The statements I have made are based upon a number of assumptions on my part. You should have an attorney examine the actual case file and documents if you want advice which you can rely upon.


  2. In my community, the Trustees require debtors to sign an authorization to allow them to intercept the tax refund. They have mentioned that sometimes the IRS, hearing about the bankruptcy, will automatically intercept the refund and send it to the trustee even though not requested. BUMMER!

    When you filed your amended Schedule C, the Trustee had 30 days afterwards to file an objection to your claim of exemption. If the Trustee did not do this and if your tax refund is no more than the amount you exempted, for the Trustee to intercept your refund and keep it would be a violation of bankruptcy law.

    What a Trustee says is sort of meaningless. It's what they do that counts. Don't go looking for trouble that hasn't happened yet. File your tax return and if you have a genuine problem, post again.

    Hope this perspective helps.


  3. The trustee would send you a demand to file and turnover the tax refund. Contact your attorney!

    Disclaimer: This answer does not constitute legal advice. I am admitted in the States of New York, New Jersey and Massachusetts only and make no attempt to opine on matters of law that are not relevant to those three States. This advice is based on general principles of law that may or may not relate to your specific situation. Facts and laws change and these possible changes will affect the advice provided here. Consult an attorney in your locale before you act on any of this advice. You should not rely on this advice alone and nothing in these communications creates an attorney client relationship.

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