Should we be making payments on a Chapter 7?
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Should we be making payments on a Chapter 7?
My husband filed for Chapter 7 bankruptcy. Today he received his discharge, although he is required to make payments to the trustee for 12 months and hand over 1/2 of his income tax return for this year. Does this seem right for a chapter 7?
Asked on September 26, 2011 under Bankruptcy Law, Florida
Answers:
Mark J. Markus / Mark J. Markus, Law Offices of
Answered 12 years ago | Contributor
That all depends. You've obviously omitted a lot of relevant facts. Were there non-exempt assets in your husband's case? Did he negotiate an agreement with the Trustee to purchase the bankruptcy estate's interest in those assets?
The prior year's tax return is required to be given to the Trustee no later than a week prior to the 341(a) (creditor's) meeting. When you say tax return, I think you mean tax refund. That's completely different. The Trustee may be entitled to a portion of your tax refund that was earned for the portion of the tax year in which your bankruptcy case was filed, unless you exempted it in your (or in this case, your husband's) bankruptcy papers.
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.
Mark J. Markus, Attorney at Law
Handling exclusively bankruptcy law cases in California since 1991.
http://www.bklaw.com/
bankruptcy blog: http://bklaw.com/bankruptcy-blog/
Follow Me on Twitter: @bklawr
Mark J. Markus / Mark J. Markus, Law Offices of
Answered 12 years ago | Contributor
That all depends. You've obviously omitted a lot of relevant facts. Were there non-exempt assets in your husband's case? Did he negotiate an agreement with the Trustee to purchase the bankruptcy estate's interest in those assets?
The prior year's tax return is required to be given to the Trustee no later than a week prior to the 341(a) (creditor's) meeting. When you say tax return, I think you mean tax refund. That's completely different. The Trustee may be entitled to a portion of your tax refund that was earned for the portion of the tax year in which your bankruptcy case was filed, unless you exempted it in your (or in this case, your husband's) bankruptcy papers.
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.
Mark J. Markus, Attorney at Law
Handling exclusively bankruptcy law cases in California since 1991.
http://www.bklaw.com/
bankruptcy blog: http://bklaw.com/bankruptcy-blog/
Follow Me on Twitter: @bklawr
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