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What if I can't afford to return my tax return to my bk 7 trustee?

San Leandro, CA |

I need the return to catch up on my utilities, service family vehicle, etc. All necessary needs, not wants.

More importantly, my disposable income per month for a family of four is negative.

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Attorney answers 6


A tax return is a document required to be filed with the IRS and state taxing agency. You are required to submit a copy of your most recently filed return to the Trustee in a Chapter 7 case. The cost of copying and submitting the return to the Trustee shouldn't be much more than the postage required to mail it.

If you're referring to your tax refund, it begs the question as to why you think you are required to give it to the Trustee. If this is for a period prior to you filing your chapter 7 case and you did not exempt it in your schedules, then it belongs to the Trustee. It has nothing at al to do with your "needs" or your income.

Exemptions are "protections" for value you have in certain assets such that they are "exempt" from collections. Every state has different exemptions amounts available. Exemption laws are based on the state where you resided for the 2 years prior to filing your bankruptcy case or, if you lived in more than 1 state during that period, in the state where you resided for the greater part of the 180 days prior to that 2 year period.

Without knowing more facts about what period you are owed the refund, if any, the value of your other assets, and what exemptions you took, etc., there's no way to advise you further.

You need to consult with a bankruptcy attorney regarding your options.

Mark J. Markus, Attorney at Law
Handling exclusively bankruptcy law cases in California since 1991.
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Follow Me on Twitter: @bklawr

Legal disclaimer: Mark J. Markus practices law in California only. The information is not, nor is it intended to be, legal advice. You should consult an attorney for individual advice regarding your own situation. Answering this question does not in any way constitute legal representation.



I appreciate your answer.


You file a tax RETURN, you get a tax REFUND. If your plan pledges the REFUND to the trustee, you will most likely need to file a motion to keep some of it. Most Trustees will require that the payment be made up somehow - like adding a few dollars to your payment, or extending your plan by a few months. You obviously did not present a proper budget if you underestimated your utility or auto expenses, etc., so you may need to adjust your schedule J when you ask to modify your plan.



yeah, or an unexpected expense altered my budget. Crazy that in these times, an unexpected expense could arise. FIRED.


I believe this is a chapter 7 case and not a chapter 13. If the trustee has demanded you turn over the refund, you must do so in order to receive your discharge. It seems as though you did not exempt your refund or were unable to exempt the full amount (protect the full amount). Alternatively, if you are able to amend your schedules to include the refund and exempt out the refund, you will be able to keep it. Exemption planning and exemption laws are complex and a bankruptcy attorney would have told you the consequences of filing your case before receive your refund. Unfortunately, it appears you did not consult one. If you want your debts discharged, you'll need to give up the refund or the equivalent amount of money to the trustee (if you cannot exempt it). Period.



I did consult and hire an attorney. I was told twice that it would not be an issue. Perhaps my attorney was just book smart, and realized the key to a passing grade was doing the minimum that is required. Apparently, the major difference between my counsel and I, is a paper that say J.D. thx


The exemption laws are very specific and create bright lines for what a person or couple is/are allowed to keep when filing bankruptcy. That means the court will not consider how much you need the money or the size of your family. The law considers it fair to subject everyone to the same set of known rules. Wish I had better news for you.

Law Office of Michael J. Primus We are a debt relief agency and help people file for bankruptcy under the bankruptcy laws. We have offices in California only.


Ask permission first. Your attorney can handle this for you

Curt Harrington Patent & Tax Law Attorney Certified Tax Specialist by the California Board of Legal Specialization PATENTAX.COM This communication is general information and not legal advice, and does not create an attorney-client relationship. This communication should not be relied upon as any type of legal advice. Please note that no attorney-client relationship exists between the sender and the recipient of this message in the absence of either (1) a signed fee contract and (2) remission of an agreed-upon retainer. Absent such an agreement and retainer, I am not engaged by you as an attorney, nor is any other member of my law firm.


When you file for bankruptcy, there is a dividing line between your pre-bankruptcy estate and post-bankruptcy estate. You cannot blur the lines for your own purposes.

If the money belongs to the estate, then it must be turned over. You have not told us how large the return is or when you filed for bankruptcy.

It does not seem that bankruptcy is helping you with your fresh start if you are still behind with post-bankruptcy expenses. Have you determined if all of these expenses (utilities, vehicle maintenance) have been incurred SINCE the bankruptcy filing? Debts incurred prior to bankruptcy do not have to be paid.



The return was 3100 dollars. More than the monthly income (net) that I earn. Thx for your response.

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