Expert: Mark J. Markus- California Bankruptcy Attorney - 4/27/2011

Question
"I filed BK-13 and according to the provisions of our Plan, any Income Tax Refund received, must be given to the Trustee along with the Tax Return for that year. In the 1st 2 years I did received money back ($5,000), but did not notify the Trustee. I know I am wrong and do owe this money to the Trustee. So, here's my question ... Can I continue paying the monthly plan amount to the end of our 60 Month Plan, and then make 5 additional payments at the end of the plan to eliminate the $5,000 plus any additional cost or fees as a result of this late payment? Or, will this amount need to be paid in one lump sum, asap? Or, if my thinking is totally wrong, what the best way to resolve this situation with the Trustee? Please advise, thank you."

and was asked on 04/13/2011

Answer
It really depends on the percentage your plan proposes to pay to your unsecured creditors.  If it is less than 100% then you can't simply make up payments at the end because the additional $5,000 will be used to increase the percentage, rather than paying off a pre-fixed amount.  Also, you're probably required to submit your tax returns in addition to your tax refunds to the Trustee so eventually  the Trustee will notice and file a motion to dismiss your case.

You should comply now with the terms of your plan, in my opinion.

Mark J. Markus, Attorney at Law
Handling exclusively bankruptcy law cases in California since 1991.
http://www.bklaw.com/