341 Meeting This Coming Friday (4/6) - Questions (Oregon)

[hnj22]

We filed Chapter 7 bankruptcy on 2/27/12 and our 341 meeting is 4/6/12. We have a few issues that I wanted to run by experienced people.

1) We borrowed about $6000 from my brother in late 2008 and 2009. Agreement was we would start paying in 2010 when my husband went back to work. We paid my brother $2880 in the 12 months prior to filing. We didn't anticipate filing when we did and were going to wait a bit longer to put more time in between filing and the payments but I got served with two lawsuits in mid February so we didn't have a choice and had to file. We obviously listed the payments to my brother in the petition. The trustee is new and aggressive and has already asked for that money back from my brother (even prior to the meeting which my atty says never happens). The money has been given back to the trustee. The trustee's pre-meeting paperwork asks for payments made within the past 2 years. So we also paid him $3100 in 2010 but were also paying our bills through consumer credit. (Things got behind in 2011.) Any issue with the trustee wanting money that we paid in 2010 back? My attorney keeps telling me no unless he can prove fraud but she doesn't think he can because creditors were being paid too. But I wanted to see if anyone else had this situation come up.

2) We had to amend our petition to include a car trailer we forgot we had (buried in the back yard, expired tags and don't use it often). We also listed my husband's life insurance as term not universal (honest mistake) and forgot to list the closed (small) retirement account my husband had that we used to pay our attorney fees since we had to file so quickly. The trailer is not exempt according to my attorney. Because we were straightforward in filing the amendment as soon as we found these things which was 2 weeks after filing but it was one more week before the amendment was filed with the court due to mailing time between me and our attorney to sign docs etc., that would carry some weight with the trustee don't you think? These things were not left out or put in the petition incorrectly on purpose. We were in a rush to file and these things got left off.

My attorney freaked when I told her these amendments and scared me to death that the trustee is now going to think we committed fraud. These were just mistakes! She has had me sick for weeks now (lost 15 lbs in one month and don't eat or sleep) with worry.

Does this money he took back from my brother (2880) and this car trailer (value 750) create an ASSET case? We do owe taxes in the amount of about $2500 so I know those will get paid before unsecured creditors so I didn't know if that made a difference.

Will the trustee allow us to purchase the trailer back if he decides to take it? If not, does he come to my house to get it?

Any advice or issues you can see that could come up that we should be prepared for?

[nohoneymoney]

Welcome to the forum! It is a great place to surf for information and to ask questions. Now.... take a deep breath. Sloooowwly let it out. It will all work out and the 341 meeting will be over before you know it and you will be on your way to a fresh start.

I hope you listed your brother as a creditor, secured or otherwise. The trustee has extensive powers to request information and certainly one year is expected. Others will have to chime in on how far back they can go. Also the definition for preferential payment needs to be explored by your attorney to help defend you but I have to agree with what you said in your post.

Not sure why your attorney felt that your amendments could be viewed as fraud. Maybe if the trustee had found them instead of you, fraud could come up but that is not how you presented the situation. We filed two amendments to correct errors the last one was discovered just prior to the 341 meeting. It caused the trustee to continue the 341 for another four weeks but that was the end of it.

As I understand the definition, the $2880 makes it an asset case assuming the trustee keeps it.

Not sure why an old trailer with expired tags would be worth $750. You should value it at tag sale or quick sale price. If you can get an offer from a dealer (in writing), take it with you to the 341 and effectively amend your petition. Remember that trustees need to believe there is enough money in an asset to make it worth their time. Do they earn enough per hour to cover their costs?

Typically the trustees will allow you to purchase property back but I have to ask why. Save the money unless you have a business need for it.

I think everyone gets nervous and upset prior to the 341 and then afterwards wonders why they did because it isn't that hard. (I was so uptight I initially couldn't remember my address and had to be prompted by our attorney.) Looking back it was all in my head. I became overwhelmed by the many different possibilities and how I would respond to each one, etc. Would the trustee take this property or that rent or my tax refund??? In the end it all worked out and we are in a much better situation today then we were in prior to filing BK. It didn't all work out like we had hoped or feared, it is just a lot better. You have just a couple of issues to work out with your attorney before the 341. You will do fine.

[hnj22]

Thank you for your reply, I really appreciate it. My brother was listed in the stmt of financial affairs but not as a creditor because he was paid off as of the filing date. It was all disclosed in the petition. As far as the car trailer, if the trustee wants it, how does he actually get possession of it? The thoughts of someone coming to my house isn't appealling.

My attorney was saying we were fraudulent because we signed the petition stating it was all true and correect which at the time we thoughts it was! Maybe she was trying to scare me and it worked! This trustee is new and aggressive and she said he will question everything because we filed the amendment - which we did to be honest!!

THank you, I will try to keep breathing!

[nohoneymoney]

Fraud involves a willful act to deceive which doesn't seem to be the case as you presented it. While it is best to get it right the first time, finding the error and correcting it is not a bad thing and I can't see how it would be fraud. The preferential treatment alleged by the trustee should have been caught by your attorney. You should ask your attorney if you need to amend your petition to put your brother as a creditor now that the $2880 has been given back by your brother to the trustee. Another reason your attorney reacted is some extent your attorney's reputation is also on the line maybe more so with a new trustee. Anyway I look at this as an honest mistake that you found and corrected prior to the 341. There was no mention of fraud by our attorney or by our trustee associated with our amendments.

It is never fun to be questioned by the trustee but if you have been open and honest in your petition, as evidenced by your amendment, with good help from your attorney, you have nothing to fear but fear itself.

I am sure it will all go well in the end. Breathing is always good.

BTW, please take the time to read the Sticky on having a successful 341. It is good reading