Tax question again

What is the name of your state? Louisiana

Hi again.
I had my 341 a few weeks ago and it was a little rough. The Trustee also told me to turn over my refund next year. That is my question, I really need that money to pay off some debts that were not part of my bankruptcy. Is there ANY way of keeping at least part of it? The tax refund will pay towards almost 40% of my debt. I do not have a lot and my refund is large, with three kids and a relativly low income. The other question is, can I stop the proceedings before the discharge? Almost all of my creditor reach the statute of limitations in less than a month and can not do anything after that anyway. The ones that can, like my medical bills, I will pay off with the refund. So, can I and if so, how hard is it to stop a bankruptcy.

Thank you for your help.
Carmen

[I AM ALWAYS LIABLE]

My response:

Yes, you can file a Request for Dismissal form with the court now, or even after an order for relief has been granted. The court may either suspend all proceedings or dismiss a case if it determines this would better serve the interests of both the debtor and creditors. [11 USCA § 305] But, be aware, too, that the court has the option to deny a request for dismissal.

IAAL

[Ladynred]

I have to ask why you left certain creditors out of your bankruptcy filing ?? You don't get to pick and choose, you are supposed to list ALL debts. With a large refund, there is no way you're going to be able to keep it and it was foolish to leave creditors out of your filing. It *could* be looked upon as fraudulent if you did it deliberately.

I did not leave out creditors. They are not actually "creditors." They are just some people that I would use that money to pay back money that they have given me, like my parents. We needed the money for some major repairs and our kids. I think I am going to ask for a dismissal, but I am not really sure yet. I can use that refund anyway to pay off several of the creditors listed in my bankruptcy, anyway. I do not know what to do. Without that tax refund we are in trouble.

I'm curious - why was your 341 rough?? What happened that made it rough??

Hey
The trustee just asked alot of "how did you know" questions. I, like an idiot used a service via internet to prepare my forms. The trustee just asked how did I know what to claim as exempt and how did I know to file chapter 7. Stuff like that. It made me nervous and got me to thinking, what if I did not do something right or forgot to list something. That is one reason that I asked about the dismissal. The trustee told me that as long as I turned over my refund that everything would be fine. I guess it would, since it would cover a lot of my debt, nearly half. I am still really considering asking for a dismissal or at this time they may do that anyway. I had the court cost set up in installments and I do not know if I will be able to pay the last one. Do you know what would happen if I did not pay it? I am really torn, continue this or be able to have the money to live on for a few months. I do not know what would happen with my creditors, the ones that I would not be able to pay back with my tax refund. THe statue of limitations is up on them in just a few weeks, all but two anyway. Do you have any advice?

If you forgot to do something and are not lying it's not that bad. There are ammendments that can be filed. If you are dismissed with prejudice that's bad. But there has to be evidence of fraud and outright lying. You may not ever be able to file on those creditors again. Dismissed without prejudice means that you can re-file again either immediately or in 180 days (I'm not sure).

My problem is that the trustee sees a big house payment as is busting my chops on it. "You could pay back a lot of your debt to the creditors if it was less".

[Ladynred]

Just to clarify, 'people you owe money to' ARE still considered to be creditors. Given that they are ALSO then considered 'insiders' (parents, friends, etc.) can get you into even more trouble as any payments to them is considered preferential. You could just as easily have included them on your creditor schedules and made arrangements AFTER discharge to pay them whatever you owe. There is NO prohibition on voluntarily paying a creditor included in a bankruptcy.

While it may be true that a lower mortgage payment may let you pay some creditors, the fact remains that you have a contract to pay on that mortgage and the Trustee cannot force you to re-fi or sell your home to buy something with a smaller payment. Trustee may have a valid point, but that doesn't mean there's anything he/she can do about it.

Hey
Thank you for your help. The money my parents gave me was not a loan, I would just feel better if I could give some of it back to them. My family has a lot of things that we need that tax refund for. I just do not understand why the entire amount has to be taken when I do not work and the debts are all mine that I acquired before I ever met my husband or thought about having children. I guess it is that community property thing Louisiana has. I still want to ask for a dismissal and if they would let me refile at a later date with a attorney. I am just afraid that something was done wrong that I did not catch or know about. THe bankruptcy clerk told me that I would have to right a letter asking for a dismissal and they would handle it from there. I do not know what to do. I thought by filing bankruptcy, it would help my family, but it seems to be hurting them more. Thank you for any advice you can or have already given me.
PS
The mortgage thing is not for me.