Tax Refund & Reaffirmation

[Choices2005]

What is the name of your state? IL

I filed Ch. 7 on the 18th of last month. My court date is coming up at the end of April. I'd like to know if I will be forced to give my tax refund to my creditors? (About $1,000) I don't plan on spending it but I want to save all of it. Should I withdraw it and give it to someone else to hold until the process is over? I've been reading many posts on this board and its gotten me very nervous about the 341 meeting and how it will go. I filed on 5 credit cards and charged on 2 of them shortly before filing. (I am continuing to send payments for those two cards) Anyone have any advice on things to do (or not to do) to make it go smoothly and quickly? Like is there anything I should take with me?

The other question I have is concerning reaffirmation. I recently purchased a 2005 Toyota Corolla. I did not file on the car and have no intention of faulting on the car. My grandfather co-signed for the car and I would never want my mistakes to affect his credit. My attorney told me that the car would not be part of the filing but that turned out to be a lie. (or omission) I recently discovered that the car was indeed filed upon and that Toyota could no longer send me any more correspondence. They told me that I could continue to send them a check each month with my account number and they would not resposses the car. They also told me that I could file a request for a reaffirmation agreement. This would basically mean that I would be resigning the orginal agreement I had with them. The difference is that my grandfather would no longer be on the loan. They also said I had to do this because it would erase the bankruptcy mark on my grandfather's credit. Otherwise, it would stay on his credit until the car was paid off. (2009) My question is if my lawyer even had to include the car at all in the filing? He told me it wouldn't be included and I discovered that he had put it on the list after all? I am very concerned that he didn't inform me about how it would affect my grandfather's credit (i asked) and now I am in a situation where I have to tell my grandfather about the filing. (I wanted to avoid this b/c he went out on a limb to help me and will very upset that I took such an "easy" way out.) I'd just like to hear from someone who has been through this process and can tell me more about what happens.

Thanks!

 

[giggle50]

Let's get one thing straight, you file bankruptcy on every creditor. Well, at least you are supposed to. If you don't list a creditor on purpose, you are committing bankruptcy fraud.

That said, you can reaffirm any debt you want. You can reaffirm the car and as long as payments are made, there will be no ill effects on the co-debtor's credit.

Do not transfer the tax refund. When people start transferring assets, they start getting in trouble. It's odd, don't you think, that the words "bankruptcy fraud" have been mentioned twice in the same post.

You need to communicate better with your bankruptcy lawyer. From your post, it appears the lawyer communicated with you accurately. All creditors must be listed, you can treat them differently by reaffirming whatever ones you want.

 

[Ladynred]

They also said I had to do this because it would erase the bankruptcy mark on my grandfather's credit. Otherwise, it would stay on his credit until the car was paid off.

First of all, as mentioned, you can NOT exclude ANY debt from your bankruptcy. If you reaffirm on your car, it will be excluded from the DISCHARGE, but it MUST be included in your filing.

However, the effect on your GF's credit should be minimal - if at all. IF your bankruptcy shows up on HIS credit, he can pretty easily DISPUTE it off. After all, HE didn't claim bankruptcy, YOU did and he's not liable unless you default.

 

[chris7]

Don't do it.

If you want to feel less nervous walking into your 341 meeting, do everything by the book. If you try to hide your tax refund you will walk into the meeting basically knowing you have committed fraud, and praying that the trustee does not find out. Not worth it, not worth it, not worth it!

 

[Choices2005]

Thanks for the advice

Just wanted to say thanks to those that replied to my post. I talked to my attorney once again and he pretty much told me what you guys had stated. My refund will be going directly into my checking account and at that point I will simply transfer it to an ajoining savings account. It'll be okay because it'll clearly come up on the statement as a "withdraw transfer" showing that it was taken from the checking and put in the savings. That way if I have to give it up I will do it. I'm also relived that my grandfather will be in the clear as soon as the reaffirmation is filed.