Personal Bankruptcy Filed Chapter 7 in AZ and kept my federal refund

[lospachecos]

Hoping you can shed some light on my situation. I filed my 2011 taxes, then filed chapter 7 in AZ a week later. I paid someone to prepare my documents for me, not an attorney. I received my federal refund and the next day I received my notification from the trustee telling me what documents I should provide and to turn over my federal refunds for 2011. I was in shock to read that I am responsible to do this and if I don't I can be prosecuted for fraud. Needless to say I am devastated! Seriously thought this was my money and I can do what I wish with it, not the case at all. I just attended my creditors meeting with the trustee and she states I have to pay it back to them or I will be sued. Is this true? And punishable by law for up to 5 years in prison??! What can I do? I don't have the money anymore and the time timeframe to hand it over is unreachable. Can I file to dismiss my case? If I do not pay my filing fee would that automatically dismiss my case? I'm in deep over my head and to think I read about Chapter 7 and never seen I would have to turn over my refund, or else I wouldn't waited until the end of the year, right? I am not trying to "fraud" anyone or the court. Thank you for advising me.

 

[Proserpina]

Yes, that's all true.

You honestly need to speak with the trustee about it - ask if you can file to have it dismissed. But be prepared for the trustee to be very suspicious of you doing this.

And seriously - get an attorney next time you file (you'll be barred from filing for awhile).

 

[disagreeable]

Wow. Horrible that they structure the law in a manner that requires you to pay money that you possess and owe, isn't it?

 

[despritfreya]

You ARE required to turnover to the Chapter 7 Trustee the tax refunds unless you had received, cashed and spent the $$ before filing. Apparently you received the $$ after filing. It does not belong to you. This issue is basic to anyone filing a Chapter 7 in AZ.

How much $$ are we talking about? You need to work out a repayment with the Trustee. Most will give you up to 6 months to reimburse the bk estate. If you do nothing the Trustee will seek to have your discharge denied. (It is highly unlikely that criminal charges would be filed so don't worry about that).

As to the dismissal, you requesting one will not work. If you do not pay the balance of the filing fee a dismissal is possible but there are ramifications if you file a 2nd case. Regardless, if the Clerk administratively dismisses the case for failure to pay the balance of the filing fee and your Trustee really wants to get the $$$ the Trustee could seek to have it reinstated. I have seen this happen once so I know it is possible but extremely rare.


Des.