Can the Trustee Take Our Entire Tax Refund?

[NC Mom in Indy]

What is the name of your state (only U.S. law)? Indiana

I filed Chapter 7 in December 2009. My hearing was also in December 2009. My spouse did not file. The attorney said that the Trustee would base the amount of money he would take from our taxes on my portion of the income vs. my husband's portion. I sent my taxes to the Trustee last week, and today I received a letter requesting the entire amount of both returns. I called my attorney right away, and he was not in. His partner said that the Trustee can take 100% of our refund in Indiana eventhough my husband did not file.

We did not file separately, because we would have ended up with no money... I would have owed, and my husband would have had a refund in the amount I owed. My husband works in a different state, so we are getting a return of the State taxes that he paid to that state, and we are getting a small return from Indiana. My husband was able to claim his son and we got a return from the college tuition that he paid. Without filing jointly we could not have received the credit.

Can the Trustee really take all of our return, or is there something that my husband can do to keep his part? I thought that the Trustee would take 25%, and I would have accepted a decision to take 50%, but the entire return? That seems like too much. Is there anything that we can do?

 

[Who's Liable?]

Yes, and you need to talk to your attorney.

Taking it all may not have covered what you owed to your creditors.

 

[NC Mom in Indy]

Yes, and you need to talk to your attorney.

Taking it all may not have covered what you owed to your creditors.

The attorney I used is never in the office. His legal assistant said that I am supposed to send the Trustee my tax returns with a letter stating what I expect to receive back. I siad that is what I retained an attorney for. She said that he only handles my Ch.7. Funny since he told me in December that my husband's part of the tax return was safe.

Who's Liable?, If my tax return would've covered what I owed to my creditors I would not have filed Ch. 7. With the amount of money the Trustee is getting each creditor may receive $10 if they are lucky by the time the Trustee takes his fee.

Since I do not have equity in my home would I be allowed to keep any portion of my tax return in exchangefor that?