Chapter 13 Debtor Beats Trustee’s Demand for her Earned Income and Child Tax Credits

Chapter 13 Debtor Beats Trustee’s Demand for her Earned Income and Child Tax Credits

A low-income Debtor filed a Chapter 13  plan which did not commit future tax refunds to the plan.  The trustee objected  since  the plan did not require Debtor to pay what the trustee called her tax “refund” as an additional plan payment each year.

The trustee  suggested that the Code “requires” her to seek tax refunds in every case in which unsecured creditors are not paid 100% of their claims. The judge noted that the trustee was “mistaken.”

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