Court Revoked Discharge of Chapter 7 Debtors who Refused to Turnover Tax Refund to Trustee

Court Revoked Discharge of Chapter 7 Debtors who Refused to Turnover Tax Refund to Trustee

Debtors filed a Chapter 7 Bankruptcy in November 2014.

In early 2015, the Debtors received a tax refunds in excess of $7,500.00.

After Debtors filed their case, the Chapter 7 panel Trustee sent them a letter that stated that their tax refunds are an asset of the Bankruptcy estate and that they should not cash the refund check or spend any of the proceeds until the Trustee determined whether they were property of the estate.

The letter also warned the Debtors that if they spent the refund without the Court first determining that the refunds were exempt, the Trustee would object to their discharge or seek revocation of the discharge if it had been granted by that time.

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