I am in the process of going through a chapter 7 bankruptcy. I met with the trustee a cpl of days ago and when he asked me if I had gotten my tax return back, I told him that I had. He then asked me what I had done with it. I told him that I had paid some bills and paid my children's grandfather back some money he borrowed me. The amount was 4000, which was borrowed so that my children and I could get a house to rent (otherwise we would have been homeless) and to buy a car since mine had been repo'd. The car is in the grandfathers name right now. The trustee infomed my lawyer that he wants the money returned to my estate in the amount of 3000. What can I do about this? I was told by the atty that my tax return couldn't be touched since it was protected when I filed, so I thought that it shouldn't have mattered what I had done with it. I have to meet with my atty again today to figure this out... PLEASE HELP ME! I cannot have him give the money back to me since he is the only person who helps me when I need it.

I think you violated your bankruptcy agreement, that's why the money must be put back. I don't think you have any other option then to comply with the trustee's request. Before using that money you should have confirmed with your lawyer. You are supposed to be bankrupt of available money at the present time. Your creditors went without.

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