Chapter 13 bankruptcy question in Oregon regarding tax refundsI am in Chapter 13. I did not pay all my income taxes for 2016 and owe a significant ( $12k) balance, because I might have a substantial refund, and didn't wish to lose it. My understanding of the bankruptcy law is that any tax refunds will probably go to the trustee
and be distributed to creditors.During 2016, I was employed as a contractor by my previous employer. The State contested that claim, and stated I was actually an employee. There has been a hearing, and I am awaiting the outcome. My understanding is that if the employer is convicted of improperly classifying me as a contractor, they will be required to pay taxes for me for that year. So if I paid my tax balance in full, and the State ordered the employer to pay taxes on my behalf, my fear was this would trigger a refund, and then I would lose the refund to the trustee.Unfortunately, I can't get a response from my bankruptcy attorney, he doesn't return emails or phone calls at this point. I have no idea what happened to him.I have talked to the state and IRS
, and they have granted extensions for me.I have two questions:
1) Is my understanding of the law correct? I have the money to pay what is owed, but obviously I don't want to lose it if the trustee takes it in the event the employer is convicted by the state and forced to also pay taxes for 2016
2) My assumption is if the refund is confiscated by the trustee, it doesn't reduce the balance owed for the bankruptcy, it's just additional money for the creditors. If the refund instead simply reduced the balance owed for the bankruptcy, then I would be fine with it, as it wouldn't be "lost", it would just be paying down the total amount owed. Which of these two cases is it?