Q: I filed a Ch7 in May 2018 and was granted a discharge. My case is still open because the trustee wanted to wait until I
filed my 2018 tax return saying "you're low income and you have kids, so I know you'll get a big return." Is it left to the trustee's discretion whether he can take a portion of my return, or does a judge decide that? Would low income circumstances be relevant in whether I can keep my return or not? Can I appeal that in any way? My family really needs the money, which is why I filed bankruptcy.
A:
Unfortunately the trustee has an obligation to collect all non-exempt funds. The current Arizona law does not protect earned income credit or child care credit.
Most Arizona consumer bankruptcy attorneys give free consultations and this issue is discussed every time. This is why I suggest most of my new clients wait to file their bankruptcy until they receive and properly spend the refunds (there are rules in how to spend the money).
Ironically I was just meeting with a reporter from the Arizona Republic who is doing an article on this very issue. You might want to call him with your story - Russ Wiles, 602-444-8616. It won't make a difference in your case because you already filed the bankruptcy, but it will make a difference in the future because a group of us is looking to change Arizona law and we need your help to convince the Legislature this is a very important issue.
Feel free to call me if you have any questions (602-246-7106) or you can contact the Self-Help Center at the Arizona Bankruptcy Court (602-682-4007). My best to you.
A: Consult with s local bankruptcy attorney to see what options and exemptions are available to you. You may be able to protect your refund from the trustee with your available property exemptions.
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