Tax refund spent prior to Attorney filing CH7

What is the name of your state? Oregon

I had lost my job, moved, got a new job at a lower salary and my wife has not been able to find a job yet....to qualified. Yeah right. Anyway, we spent our savings trying to keep the collectors off our backs.

Now, I hired a attorney in Feb 04 for CH7, got my tax return 02 Apr 04, signed the CH7 paperwork 12 Apr 04, expect a court date in July according to my attorney. Here is the question.

I spent my tax return, $3000, catching back up from not having squat for 6 months. School cloths for kids, tires for car, fixing broken stuff from the move, etc. No high end/luxury items. Should I worry that the Trustee will ask for receipts? (I don't have many). Or will the Trustee even care since by the time he sees me in court, it will be three months in the past?

Any additional thoughts that might be relevant would be appreciated.

Thanks

[Ladynred]

For that much of a refund, you better start digging for receipts ! Since you didn't blow it on luxury items, but for necessities it shouldn't be a problem, but you MAY be asked to produce proof of where it all went.

Since you got the refund prior to filing, it IS considered part of the BK estate, doesn't matter how far in the past by the time you get to your 341.

[JETX]

"Should I worry that the Trustee will ask for receipts? (I don't have many)."
*** Yep, big worry.

"Or will the Trustee even care since by the time he sees me in court, it will be three months in the past? "
*** Yep, the trustee could take a VERY dim view of your decision to spend the $3k on items OTHER than the creditors. So much so that he might consider your case possible fraud (unlikely, but possible).

[VR_Hunter]

Make sure the return is spent prior to the actual filing of the BK. You don't have to keep receipts for the whole amount, but you had better have a majority of the expenses accounted for. Make sure your attorney is aware of the return amount.

The trustee may not ask for bank statements, trustees are very busy. Since you have an attorney, the trustees do not usually dig very deep unless you say something stupid during your 341 hearing.

Originally posted by Ladynred
For that much of a refund, you better start digging for receipts ! Since you didn't blow it on luxury items, but for necessities it shouldn't be a problem, but you MAY be asked to produce proof of where it all went.

Since you got the refund prior to filing, it IS considered part of the BK estate, doesn't matter how far in the past by the time you get to your 341.

I pulled quite a bit of cash out of the ATM machine over several weeks and used it for the mall (cloths), tires for the truck I am keeping, parts for the secured items I am keeping, groceries, etc. I have receipts for things that were broken and replaced during my move to Oregon, but that only amounts to about half of the tax return.
I know I may get a sarcastic remark for this, but...how is the trustee going to know how much I got back on my return if I don't tell him?
Damn it, I worked hard for 20 years keeping my bills paid. NO, I am not trying work the system, I am around $1400 in the hole every month if I were to try and pay all my bills. I am keeping several that I can afford, but the rest must go to prevent garnishments, and law suits.
Anyway, I guess it comes to asking this. I don't have all the receipts (thought since I used it prior to actually filing, it wouldn't matter), am I facing a trustee advising against my BK? And do YOU think the judge would agree even though I don't have the monthly funds to pay $1400 of the bills due each month?

My attorney said to spend it prior to filing, but from what I have read and you all have posted, that doesn't seem quite exact.

[JETX]

A good Trustee will have copies of your bank records back several months. When he/she sees those 'cash' ATM transactions, a good Trustee will question them. Oh, and your bank statement will also show a large cash deposit (taxes) which should also raise a flag to him/her.

And of course, you could be lucky and get a Trustee who just 'goes through the motions' and hope that a smart creditor doesn't show up at your 341 meeting to challenge those expenses.

[Ladynred]

How are they going to know how much you got for a refund ??

That's easy - its quite typical to be asked for at LEAST your recent tax return, and sometimes they want to see 2 years worth. So, once your lawyer, and the Trustee, sees the tax return..well.. get ready to start 'splainin'