What would you like to do?
If you have filed Chapter 7 this year and your spouse has failed to turn over her tax refund can either of you be brought up on criminal charges?
Normally no. What is most likely to happen is that your bankruptcy will be dismissed for failure to comply with the Trustee's request for the documents.
I agree with Nate; failure to produce the tax refund normally results in dismissal rather than in criminal proceedings. However, if one spouse complied with the trustee's wishes and one spouse did not, the spouse who complied can move to have the case de-consolidated, so that the spouse in compliance still successfully receives discharge and only the non-compliant spouse gets dismissed. The court charges a fee to de-consolidate a case, and the attorney representing the debtors normally charges additional fees for the extra work as well.
Please note that nothing in this posting or in any other posting constitutes legal advice; this is simply my understanding of the facts, which I do not warrant, and I am not suggesting any course of action or inaction to any person.
39 people found this useful
Was this answer useful?
Thanks for the feedback!
If you and your spouse have filed Chapter 7 then she CASHES her tax refund what will the trustee do when he finds out?
The trustee has several options, but the one you need to be concerned with is REVOKE YOUR DISCHARGE then have you charged with bankruptcy fraud by the F.B.I which rarely resu…lts it jail time, but could carry a fine up to $10,000 with a possible felony record. If you can't afford to pay the bills you can't afford to lie to the courts either. Good luck.
What happens to a joint tax refund totaling over five thousand dollars if your spouse files an individual Ch 7?
Answer The answer to this question may vary from district to district, but it has been my experience that trustees normally make the debtor determine how much of the… $5,000.00 belongs to the debtor and how much belongs to the non-filing spouse, and then the trustee only takes the portion which belongs to the debtor. This may not be as simple as it seems, since it may be unclear how to divvy up various deductions between the debtor and the non-filing spouse. As a rule of thumb, I would divide the tax refund check by the percentage of overall income each spouse contributed to the household, and the trustee will probably take the percentage the debtor contributed. Please note that nothing in this posting or in any other posting constitutes legal advice; this is simply my understanding of the facts, which I do not warrant, and I am not suggesting any course of action or inaction to any person.
Filing Return While in Bankruptcy Yes, you still have to file your taxes as usual. Any refund will probably be appropriated by the trustee and treated as a nonexempt as…set, which will be used for repayment of creditors. Adding As indicated, this is one of your assets and must be disclosed to the creditors committee as something they can use to pay your debts. They will probably ask about it if you don't provide it. They've seen it many times before.
Can criminal charges be brought against you if your car was supposed to be repossessed and you have not turned it over?
Answer Usually, the payment agreement for your car is considered a civil issue and should you choose to turn your car in after they have tried to reposses …it, you should not face and CRIMINAL charges. However, the loaning agency always reserves the right to sue you for monitary considerations.
Answer The answer depends on who the creditor is and the status of the debt. If the debt was a student loan or other non-dischargable debt, then your tax refund …can be taken. If the debt WAS discharged, ANY collection action of any kind on a discharged debt is a violation of the permanent injunction of the discharge and therefore illegal. If the creditor was not included on the creditor matrix, then informing them of the bankruptcy and discharge of the debt may be all that is necessary to have the refund returned to you. In other cases it may be necessary to file a Motion for Contempt against the creditor in bankruptcy court. This would require the re-opening of the bankruptcy.
Answer This Q has been pushed around a lot here...and this is what I've pieced together: It depends...a bit on which circuit court your in and how they feel.…..and expecially how much is involved...(obviously large amounts are wanted for creditors...and it just seems unfair for you to not pay someone your debt, because you didn't have the money, because you had too much withheld or prepaid...when the amount withheld/prepaid is controllable and returned to you!) The other aspect is when you filed compared to when you made your money...If the overpaid tax is for a pre-petition filing period...most trustees want it...but if it really isn't then it's yours. So say it's a refund for the year and you filed BK in December.....well it was basically all withheld as part of the Jan-Dec period in your filing...and it part of the BK...but if you filed in say March...well not much of it is really from the covered BK period. Sort of makes sense.
Can one spouse that has never filed Chapter 7 file even if the other spouse has filed less than 8 years ago?
Yes. Only a joint filing earlier would prevent it.
Depending on some things, like when the tax was paid and when the BK was filed, the refund is like any other asset and available to creditors. The trustee or court would… take it and pay it to creditors according to their standing in the case.
Either way they will want a tax return filed before filing for chapter 13. If you are expecting a refund then they will seize it if it is after so to keep the money fi…le first and wait for the return, it will be considered as part of your income. If you owe it is better to know the amount before filing.
Very likely...the refund is because you had more money than needed withheld from your paycheck and pu in (essentially) a savings account at the IRS to pay your eventual …liability. This money, earned and saved pre-filing, had you not had it put aside (or had you correctly estimated and completed the W-4 so the right amount was withheld), would have been available to pay the creditors. You know, you could literally have had 100% of your pay withheld....think it makes sense youc could get and keep it after filing BK? Of course, as BK is Federal Law, and in a FEDERAL court, the State makes no difference. And of course, the Court has some discretion in these things too.
The amount, no Will some part of it likely be used to pay your debts (because if you didn't have too much withheld that is what I'm sure you would have done with it… then), yes.
Yes. And the court will likely want to see your return.
If received for last year yes. the one for next year, received after filing, no.
If you received a tax refund in April of 09 and filed a chapter 7 bk in June of 09 can they take your refund you receive in 2010?
No. It was not part of your "bankruptcy estate" as of the date of filing and is not one of the items that have to be reported if received within 6 months of filing. Especially… if you do file your return until April.
A married person may file for bankruptcy without including a spouse. The particular circumstances governing the situation will dictate whether this is or is not a wise decisio…n. Property held in joint names such as a house may not be protected from inclusion in the assets to be distributed merely by reason of being in joint names with a spouse.
The tax refund goes into the bankruptcy estate. If your chapter 7 filing did not exempt the refund, the money will be used to pay the trustee and to pay your debts pro rata. T…hat is, each creditor gets an amount equal to the percentage the debt is to the total indebtedness. You are not likely to get anything back, but if all the debts are paid off 100 per cent and the trustee is not entitled to any more money, the balance will be paid to you. The trustee should have decided what s/he is going to do. If you have a lawyer, s/he should discuss it with the trustee. You can also talk to the trustee or your case manager. I doubt you will get any of the refund, but make sure to stay on top of the issue and get notices of any trustee motions regarding these funds.