Posted on 07/19/2011 1:22:58 PM PDT by caringforlife31
If you have fallen on hard times like my wife and I and you file any type of personal bankruptcy be very careful that your assigned US bankruptcy trustee has disclosed all pertinent information to you. In our case we used a licensed bankruptcy petitioner who gave us incorrect information about our income tax refund which was not filed for 2010 yet. We were told we need not list anything about our 2010 income taxes since we had not filed yet nor had any w-2s etc. Our bankruptcy case was filed august 2010 and was discharged in dec 2010. In September 2010 we met with our bankruptcy trustee and he never even asked us about our income tax refund and had us sign something acknowleding we had received all tax refunds filed with the IRS. The trustee had our 2009 income tax paperwork indicating our refund of over $7,000 and yet said nothing. We were supposed to list our expected tax refund and we could have used the wildcard exemption since we still had unused exemptions for personal property however the trustee took it upon himself to omit any conversation about our income tax refund and filed with the IRS to intercept our income taxes once filed. We filed our income taxes in 2011 and the IRS sent the trustee our refund check. We called the IRS wondering why we had not gotten our refund check. The trustee had to petition the court to reopen the case to distrubute the dividend. By this time we filed an amendment and hired an attorney. The judge allowed us to file the amendment since the case was reopened and we exempted our tax refund. The trustee objected saying it was untimely and and the judge allowed us to hold a motion hearing to allow the amendments. Our attorney pointed out there was never any conversation about the refund with the trustee with us on the record and the trustee did not file any type of notice they would garnish our tax refunds. The trustee signed off on our chapter 7 case saying there were no funds to distribute to creditors but still slipped in the interception letter to the IRS. The judge sided with the trustee saying that we acted reckless to not list our expected tax refund even though the judge acknowledged we were mislead by our bankruptcy preparer. The judge admitted it was a mistake to allow us to amend the case after it was initially reopened. I contacted my congressman to find out why the government allows for this type of abuse to debtors. We refuse to be victims of circumstance as the judge explained we are unfortunate victims of the system! I have asked my congressman to lobby for additional requirements of trustees so that debtors can have a fair case. Our case was not fair, also there are no federal or state guidelines for what a bankruptcy preparer can say to you or provide false legal advice in our case. The court should have informed us of the failure to list our income taxes as a personal property item-the trustee failed to ask why our taxes were not listed because he knew he could just file to have them seized. We had plenty of exemptions. That is not very fair to me. Bankruptcy trustees do not play a fair game and it is sad to victimize debtors who are in a financial crisis already!
So, basically, you’re upset because you don’t get to keep the money you didn’t disclose and it has to go to your creditors? Nice... And people ask what’s wrong with people these days?
You must be a democrat. You owe money, don’t pay it back and are mad because the trustee seized an asset. A new victim class, I guess.
PS
You might find a more sympathetic audience at DU.
That’s why people declaring bankruptcy get lawyers to represent them against hostile interests.
Sounds to me like the creditors got stiffed by the trustee -- but that trustee made sure he got paid.
I glanced for a second at the thread, looked at the first 6 replies, and knew - just knew this thread was gonna be good.
(grabbing popcorn...)
Yup. That’s a bit of a “DUH.” Courts (any kind: Civil, Criminal, Bankruptcy) are by nature conflicts.
Oh, BTW: IB4TZ!
What the heck are we, a listening post?
So who got the money? The creditors or the lawyers?
If your bankruptcy was discharged in December of 2010, then why did the IRS send the 2010 refund check to the trustee?
Something doesn’t add up here.
Signed up TODAY to cry about this?
Welcome to FreeRepublic.
First, you should have hired an attorney, not a hack petition preparer. In Colorado, some of us among the debtors’ bar (and a couple of trustees as well) are fighting against these petiton preparers in the bankruptcy court. We just scored a good victory against one yesterday.
Second, forfeiting an income tax refund in exchange for the discharge of typically tens of thousands of dollars in debt is a heck of a good deal. Chapter 7 is “liquidation” after all.
Third, formatting is your friend. Paragraphs were invented for a reason.
Waaaaaa
STFU
It is a shame you did not know to use the exemption you had available, but since it was not used for that refund, I believe it was proper (at least as far as the law goes) for that to be distributed to the creditors.
There are SOOO many laws, rules, and regulations that come into play when one claims bankruptcy. It is not something a normal citizen is able to do properly and should not even be done with an attorney who does not keep up with bankruptcy law (law that changes ALL the time). Many people who claim bankruptcy without an attorney find their bankruptcy claim getting thrown out because they either do something wrong or don’t do something they should.
Can you just imagine having creditors, court cases, and judgements set aside after claiming bankruptcy only to have that bankruptcy case thrown out? That person (or family) is headed for more than they would ever have thought possible when THAT happens. The flood gates open then, and they open WIDE.
It looks like you did not do something you should have done... understandable... but still... It sounds like you did at least get discharged and are just not going to get that refund. I’m thinking you are actually VERY fortunate the judge did not do something more for having that hidden income. (OK, even if you did not MEAN for it to be hidden, it was hidden from the court none the less.) Be counting your lucky stars your discharge did not get overturned and that you still have a chance at a fresh start at least.
For those who don’t like bankruptcy at all, I’m not gearing my comment to you. You have your right to feel the way you do,and there is a lot of truth in what many of you think... People should honor their word!
However, I’m just sharing with those who are considering bankruptcy in their future. Do NOT try to do that without a bankruptcy attorney. If you are low income, check out your country’s legal services. If you have a higher income and do not qualify for assistance but feel you are too strapped to pay for an attorney, CALL AN ATTORNEY OR TWO and make use of the free initial consultation most bankruptcy attorneys offer. They will at least get you started off and can even see if you can possibly make payments for some services. A good bankruptcy attorney will walk you through the process and tell you if there is any way possible to use his or her services.
Just don’t try to do it on your own or you may face something FAR worse than what happened here.
caringforlife31, best wishes on your new start. Don’t waste that opportunity you now have to do it all right this time around!
If you have fallen on hard times like my wife and I and you file any type of personal bankruptcy be very careful that your assigned US bankruptcy trustee has disclosed all pertinent information to you.
In our case we used a licensed bankruptcy petitioner who gave us incorrect information about our income tax refund which was not filed for 2010 yet. We were told we need not list anything about our 2010 income taxes since we had not filed yet nor had any w-2s etc.
Our bankruptcy case was filed august 2010 and was discharged in dec 2010. In September 2010 we met with our bankruptcy trustee and he never even asked us about our income tax refund and had us sign something acknowleding we had received all tax refunds filed with the IRS. The trustee had our 2009 income tax paperwork indicating our refund of over $7,000 and yet said nothing.
We were supposed to list our expected tax refund and we could have used the wildcard exemption since we still had unused exemptions for personal property however the trustee took it upon himself to omit any conversation about our income tax refund and filed with the IRS to intercept our income taxes once filed.
We filed our income taxes in 2011 and the IRS sent the trustee our refund check. We called the IRS wondering why we had not gotten our refund check. The trustee had to petition the court to reopen the case to distrubute the dividend.
By this time we filed an amendment and hired an attorney. The judge allowed us to file the amendment since the case was reopened and we exempted our tax refund. The trustee objected saying it was untimely and and the judge allowed us to hold a motion hearing to allow the amendments.
Our attorney pointed out there was never any conversation about the refund with the trustee with us on the record and the trustee did not file any type of notice they would garnish our tax refunds. The trustee signed off on our chapter 7 case saying there were no funds to distribute to creditors but still slipped in the interception letter to the IRS.
The judge sided with the trustee saying that we acted reckless to not list our expected tax refund even though the judge acknowledged we were mislead by our bankruptcy preparer. The judge admitted it was a mistake to allow us to amend the case after it was initially reopened.
I contacted my congressman to find out why the government allows for this type of abuse to debtors. We refuse to be victims of circumstance as the judge explained we are unfortunate victims of the system!
I have asked my congressman to lobby for additional requirements of trustees so that debtors can have a fair case. Our case was not fair, also there are no federal or state guidelines for what a bankruptcy preparer can say to you or provide false legal advice in our case.
The court should have informed us of the failure to list our income taxes as a personal property item-the trustee failed to ask why our taxes were not listed because he knew he could just file to have them seized. We had plenty of exemptions. That is not very fair to me.
Bankruptcy trustees do not play a fair game and it is sad to victimize debtors who are in a financial crisis already!
Much easier to understand now.
I am sorry you had to file for bankruptsy. The financial scam called the real estate boom and easy loan money and it’s ensuing job losses and bankruptsy has screwed many Americans.
It is wrong that the trustee misled you. Many Freepers are not that far from bankruptsy themselves, truth be known. Not all conservatives are for the amoral legal elites’ lying and scaming schemes. Just wanted you to know.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.