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Can my former employer keep the tax withholding?

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S

spock2001us

Guest
What is the name of your state? Michigan

I filed chapter 7 and 341 was on April 30.

I named a former employer in the BK who I owed $68,000 which was a forgiveable loan as part of a hiring bonus when I joined their company. The loan was forgiveable over 5 years so long as I remained employed. Each year that I remained employed with the company 1/5 of the loan was counted as my income, and I had to pay the tax on it at that time.

The company would withhold tax money from each of my paychecks, so that when the $17,000 loan forgiveness would hit, the money was there to pay the tax, kind of like an escrow account on a mortgage.

The company terminated me in 9/02 and there was $3600 in the account to pay the tax on the forgivable loan.

Since the company was chasing me for the $68,000 balance, I named them in my chapter 7 bankrupcty.

Today is the 61st day since 341, and the company had previously made no claims. I called the company to ask about the $3600 that was withheld to pay tax on a loan that is now non existent and the attorney for the company told me they were keeping it as part of the money I owed them. I pointed out that I no longer owe them any money, so the atty said he was going to file a claim as a SECURED creditor and say that the $3600 is now their money.

Can he do that?....The 60 days since 341 has passed, today is day 61. The money was withheld from my pay for Federal Tax Purposes. The atty for the company says his address was incorrect on the filing, even though I personally notified him over 30 days ago to leave me alone.

I have not been able to contact my own atty in this matter...I really need this money soon as I am a single parent.

Thanks
 



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