filing bankruptcy

[Anonymous]

I have an USDA rural development loan which is a government agency they have put an offset on my 2008 tax return. I have filed a chapter 7 BK and I have a court date June 12. I have not yet filed my taxes due to this offset that the usda put on there since I filed bankruptcy on usda will the offset lift off. My husband is on SSI and they were garnishing his check due to it being a government loan but since our BK has been filed it was lifted off  So again my ? is will this offset be lifted on our taxes and would it be safe to go ahead and file or wait? 

[Anonymous]

The BK may remove the offset, but it will not provide free reign of the cash.  BK will liquidate your debts and cash is not exempt unless it is in certain types of retirment or health accounts.

[Anonymous]

I filed BK last year in October (2008) and it discharged at the first of the year.  The reason I filed BK is because I got a divorce, and my ex-husband let our house go into foreclosure, after I moved.  So this left us with $37,000.  owed to the USDA.  My stimulus check was offset in 2008, so I knew they were coming after my tax return too...  So I figured it was safe to file my taxes after filing BK and getting the discharge letter.  Guess what.......it wasn't.  It is May 18th, and my lawyer is fighting to get my tax returns back and I just fear that I won't get the money back, even though, the money IS LEGALLY MINE.  They have it and don't give a crap about me at this point.  ...the collection agency had me fax them some papers on my bankruptcy, about 20 pages, and now that they have the papers, they tell me that the collection has been sent back to the USDA, but when I ask if they have a number I can call to get things rolling, they tell me that they don't have a "direct" number and that "someone should be contacting me"  I'm exhausted trying to call all the numbers, and get my money back...  I've been doing this for nearly 5 1/2 months now.  If anyone had any ideas about what I can do, I would appreciate it. 

[krielly]

To say that cash is not exempt is not an accurate statement. It all depends where you live. Some states have exemptions for cash up to a certain amount. Other states have what's called a "wildcard exemption" which can be used up to its full value for any combination of assets not otherwise exemptable.

K

[Anonymous]

well, I'm not sure exactly what you're trying to say.  I just know that my lawyer has told me that they weren't supposed to offset any more of my tax returns, or stimulus checks, or whatever.... I have pretty much figured out, that I'm probably gonna let someone else claim my kid, and I'm gonna break even on my taxes during the year so they can't get any more tax returns if that's the way they're gonna play!!  I think it's stupid though, that you file BK, and then they can still take your money?  just doesn't make sense to me. 

[Anonymous]

Even if the USDA doesn't take it, it doesn't mean you get it.  Technically that money is an asset of your BK case and the court can take it and divide it between your creditors.  Depends on how smart they are in bringing it to the courts attention, how detail orientated your Trustee is, and whether or not your attorney protected the funds with an exemption.

Now, thats just for the 2008 tax return due this year (2009).  And if you haven't filed yet, you have to get it done.  Sometimes a Trustee will hold up discharge until they get returns, so they see how much money they can give creditors.

(Remember, this is NOT legal advice)

[Anonymous]

Yes, I understand this is not legal advice   thank you for it though!  So even after my BK has been discharged(it was discharged in Jan 2009), they can still just take my tax returns indefinitely?  I filed chapter 7...I thought they couldn't take anything else after the discharge...what would be the point in filing BK if they could continue to collect?  My BK was discharged before I filed taxes...and I got a pretty good return, because I have a kid, and got the Earned Income, plus a college exemption...  so, being a college student, I would like it have the money, if it is in fact something I should have received......

[Anonymous]

If you already have a discharge and that debt was listed in your BK, then your tax return should be yours.  Technically they can fuss and try to get part of it for money owed to you through the date of your filing...but most creditors dont get that convoluted.  They just try to snatch the whole thing and hope your lawyer lets it go.  Stay on your attorney.  Its his job to handle this.  He should have the address of the contact at USDA to take care of the matter. Its not a violation of the stay since your case is discharged, but can be construed as a fraudulent attempt to collect.

(Remember, this is NOT legal advice)

[Anonymous]

Yes, this debt was discharged in my BK...  The only problem is, Progressive was the collection agency for that debt.  When I got a letter saying that Progressive was the agency that caused the offset on my tax return, we (my attorney and I) called them, and I faxed a ton of BK documents to them to "prove" my BK.   With that done, Progressive said that it (the collection?? I assume, they really didn't clarify what "it" was) had been "sent" back to the USDA, but "don't have a number for me to call the USDA".  My lawyer is trying, but hitting the same wall that I am with the Progressive/USDA situation.  There are SOOOO many branches of the USDA that it's hard to find the correct department that has handled my case.  It's irritating, but the return was considerable enough that I'm willing to hang in there and fight for it.  I WANT IT. ha ha ha.    I'm probably gonna give them a call back tomorrow, and start calling them every day, until one of them coughs up a number!  That's all I know to do at this point.  It's bad when my lawyer can't even track it down.  Like I said before, if anyone has any ideas of where I should call or who, I'm OPEN!! I'LL DO ANYTHING   BIG Thanks for all the replies schwrtzfamly!!!!!!