Adversary Proceeding Time Limits For Filing

[booboo]

Can someone please answer this question for me:

We own a second home that we are surrendering in a chapter 7. Our 60 days post 341 is up tomorrow. A person has threatened to file a AP in this case because they claim to have an interest inthis home via a constructive trust which does not exisit, but is adamant they do. He has threatened to file a adversary proceeding in my case to stop the home from being discharged in my BK, but my 60 days are up on Saturday (10-24-09). If this adversary proceeding is not filed by then, have they missed their deadlines?

Please shed some light on this for me, I am worried out of my mind.

BooBoo

[ForumReader]

Can someone please answer this question for me:

We own a second home that we are surrendering in a chapter 7. Our 60 days post 341 is up tomorrow. A person has threatened to file a AP in this case because they claim to have an interest inthis home via a constructive trust which does not exisit, but is adamant they do. He has threatened to file a adversary proceeding in my case to stop the home from being discharged in my BK, but my 60 days are up on Saturday (10-24-09). If this adversary proceeding is not filed by then, have they missed their deadlines?

Please shed some light on this for me, I am worried out of my mind.

BooBoo

I am sorry this happened to you-- just before your 60 days is up. Have you gotten in touch with your attorney (that is if you retained one) regarding this AP? If so, what did the attorney advise?

[justbroke]

We own a second home that we are surrendering in a chapter 7. Our 60 days post 341 is up tomorrow. A person has threatened to file a AP in this case because they claim to have an interest inthis home via a constructive trust which does not exisit, but is adamant they do. He has threatened to file a adversary proceeding in my case to stop the home from being discharged in my BK, but my 60 days are up on Saturday (10-24-09). If this adversary proceeding is not filed by then, have they missed their deadlines?

First, the 60 days are up on Monday 10/26/2009. This is because a due date cannot fall on a weekend, holiday, or other day in which the Court is closed for business.

Most of the time, the threat of filing a complaint (Adversary Proceedings/AP), is just that... a threat. You will need to wait until Tuesday 10/27/2009 to check PACER to see if a complaint was actually filed. Otherwise, you would have nothing to worry about!

Sending you good vibes and an uneventful Friday and Monday with respect to this issue!

[AngelinaCatHub]

It is my understanding that the AP has not been filed. You are giving back the house to whatever Trust real or not, or mortgage company, or personal fianancing will have no standing what-so-ever. An AP is a seperate suit but related to bk. This can be a bluff to get money from you. Unless you committed some sort of fraud, in the bk or within the sale or agreements of the purchase of that house, or you performed a malicious act against a creditor, you will be discharged and that debt as well will be discharged.

http://www.law.cornell.edu/uscode/11/usc_sec_11_00000523----000-.html

'Hub

[booboo]

Thanks for your answers. The issue stands is that my mother-in-law signed over her interest to a home to my wife and I in August of 2002. Our intent was to buy this home for her so that she could live her remaining life there and then sell the home and split between the other siblings upon her death.

The attorney who arranged this sale contends that this title was to be held in a "construtive trust" , but never set up a trust because he said that her mental state would not have allowed it, but I guess he thinks it was good enough to get her to sign her interest away to us 2 days prior to the trust claims. Now the brother who stayed in the home to care for her has refused to allow us to sell the home when she passed in 2007 stating that we committed fraud by taking a 2nd out on the home in 2005 because of health reasons and needed cash. At the time of her death (10-07) the home was worth $350K, but his actions in court, legal manuevers, etc has now allowed the home value to sink to about $150K and the 1st (which he was paying) at $386 per month with a balance of $58K remains, but the 2nd balance is $55K...taking these 2 balances now probably exceed the value and this is what his complaint is about. He opened a probate to try to get this home put into a construtive trust, but has so far failed but the litigation is on-going. We could not afford to keep up with the 2nd because of oour of financial problems and was forced to file BK in July 09 and listed this home in our BK, hence his lawsuit. I might add that the trustee was informed of this litigation so nothing was concealed from the trustee.

A letter finally surfaced( 16 months later) which stated we agreed to allow him (the brother) 40% of the sale proceeds (for taking care of mom) upon the sale and that the attorney that drafted this letter is representing him, we do not remember seeing this letter, nor do we remember signing this. The letter stated that he was setting up this trust, but he never did because of his claim of my mothers mental state and that he could have been sued for malpractice, however saying that, this letter was only signed by my wife and not the other sibling who would be part of that trust, nor did it have my mothers signature on it, nor was it notorized. Did we sign this, we don't think so and these signatures could have been lifted from other documents, but regardless we do not think this letter this will hold because it lacked the other siblings signature nor was it signed by mom. But there contention is that we committed fraud.....what a mess, but untill they file a AP, legsl advise has not been gathered.

Very worried, but based on what we have said, I think we are OK. At no time was the equity in trouble but his refusal to allow the sale and his friviolus actions have caused over a 2 year delay and the home value sank over $200K.

BooBoo

[EbbTide]

Boo:

First of all, lawyers don't set up constructive trusts, the court does.

Now, whose names are on the deed.. and how are they listed...in common, joint, etc.

[booboo]

Mine and my husbands, Joint tenents in common.

[EbbTide]

Mine and my husbands, Joint tenents in common.

Well, tell the brother to go pound sand...



A constructive trust is an instrument by which the Courts punish someone who used excessive force, undue influence, even murder to unduly profit from the estate of the deceased.

He's not proven his complaint.

What we did with my mother's home was set up a life estate. She remains the owner of the house for all intents and purposes, then once she passes the house goes to the children, the proceeds of the sale to be distributed according to the terms of her will.

[AngelinaCatHub]

Well, tell the brother to go pound sand...



A constructive trust is an instrument by which the Courts punish someone who used excessive force, undue influence, even murder to unduly profit from the estate of the deceased.

He's not proven his complaint.

What we did with my mother's home was set up a life estate. She remains the owner of the house for all intents and purposes, then once she passes the house goes to the children, the proceeds of the sale to be distributed according to the terms of her will.

Ebb is accurate. As I said before, you really don't have a problem. Bk Judges really do not like trying civil cases in bankruptcy Federal Courts. If your judge tried your case (and you insist on a Jury Trial), I don't think your brother has a very strong case. You say he took up payment on a mortgage and also bked? Well he does not have the money to pursue this either. I believe he is attempting legal theft of this house for his own use. Nice sibling you have. 'Hub

[AngelinaCatHub]

After further research, rule 4007 applies. Any debtor or any Creditor may file an AP. Is your brother a creditor in any way to you and is he listed within your bk or on your Matrix? If he is not directly involved he can't mess with your bk. It is ambiguous as to the time limit but in other places referring to this subject, your 60 day is the limit. Therefore Monday at 5:00pm you are off the hook. They MUST have a docket number before that time or enter a Motion for more time with VERY good reason. They don't have the time and time is in your favor.

http://www.law.cornell.edu/rules/frbp/rules.htm

We got our AP on the 53rd day. Our AP was abated as it was a non finished old law suit of 2003. My real b*tch was the Civil suit was not closed after 17 months of no action, the Court should have closed it for failure to prosecute. But the Federal Court ignored the state court of time limits but then through it back to state. So the Adversary still has not acted upon the Civil Suit and 1/9/10 it will be another year and I shall prompt the Court to close this case and our AP will be dismissed as it is abated to the outcome of the Civil suit. 'Hub

[AngelinaCatHub]

A constructive trust is an equitable remedy resembling a trust imposed by a court to benefit a party that has been wrongfully deprived of its rights due to either a person obtaining or holding legal right to property which they should not possess due to unjust enrichment or interference .[1] A constructive trust is not a trust, in the true meaning of the word, in which the trustee is to have duties of administration over a period of time, but rather it is a passive, temporary arrangement, in which the trustee's sole duty is to transfer the title and possession to the beneficiary.[2]

http://en.wikipedia.org/wiki/Constructive_trust

Who is/was the Executor if your Mother had a will? If intestate, you may get your own constructive Trust and petition the Court to make you the executor.

You state, you are giving up the house, your brother has stopped paying on it as well and is bk now?

As interested as I am in this, I believe your concern is moot. Tuesday morning you will feel better (after checking PACER), and so will we. LOL 'Hub

Edit: In thinking more of this. YOU GUYS own the house. The Deed states so and no flimsy side agreement would change that. It would have had to been in contract form.

[MSbklawyer]

Can someone please answer this question for me:

We own a second home that we are surrendering in a chapter 7. Our 60 days post 341 is up tomorrow. A person has threatened to file a AP in this case because they claim to have an interest inthis home via a constructive trust which does not exisit, but is adamant they do.

I don't think it will affect your discharge either way. Assume for the sake of argument that the person is 100% right -- that is, they DO have some sort of constructive trust on the house. The res of the trust is the house -- not some promise that you have made to pay this person. All a bankruptcy discharge does is wipe out your personal obligation to pay. So getting your discharge would not affect the trust, even assuming it exists. If, as part of the AP, this person objects to your discharge and assuming he files it timely, it would gum things up for a while, but ultimately, the existence vel non of the trust is immaterial to your discharge.

Now, that being said, you've got a separate legal problem: Someone claiming an interest in your home that you say is not valid. If the bankruptcy court addresses that issue at all, it would most likely be only to transfer it to the proper state court. But since you are surrendering the home, unless there is going to be a surplus after the sale, you don't even have an issue there. Let this person and your mortgage holder duke this out and you can pop some popcorn and watch from the sidelines.

[AngelinaCatHub]

I don't think it will affect your discharge either way. Assume for the sake of argument that the person is 100% right -- that is, they DO have some sort of constructive trust on the house. The res of the trust is the house -- not some promise that you have made to pay this person. All a bankruptcy discharge does is wipe out your personal obligation to pay. So getting your discharge would not affect the trust, even assuming it exists. If, as part of the AP, this person objects to your discharge and assuming he files it timely, it would gum things up for a while, but ultimately, the existence vel non of the trust is immaterial to your discharge.

Now, that being said, you've got a separate legal problem: Someone claiming an interest in your home that you say is not valid. If the bankruptcy court addresses that issue at all, it would most likely be only to transfer it to the proper state court.

Good info, glad to see you here. Question, they are on the Deed jointly husband and wife. I cannot see this other than being thrown out of Court for lack of creditable claim to the property. Just because the brother lived there, and took care of their Mother, does not give him "squatter's" rights.

So far the Op states they have not gotten an AP yet but are threatened to get one. 2004 rule states only a Creditor, or Debtor, but not just an "interested party" could object to discharge of a debt. Also if it does not come by Monday close of day, the AP cannot be initiated. Can you agree or clarify?

Forgive me for being so interested in this one but I have an AP over my head now for the last two years. It is still in limbo. 'Hub

[MSbklawyer]

On additional caveat: If they do file an AP, you may need to amend your schedules to list this person and your mortgage holder as potential creditors (disputed creditor, amount unknown) for any liability that you may incur to the losing party if it is found that you did give somebody a trust and just didn't tell the bank about it.

[booboo]

Interesting that this is brought up. Yes we did list him as a creditor for$100K as an assumption of money assuming his share of the home and his ongoing litigation. His litigation they he started against us is in Calif, our BK is in Oregon.

He 1st started this when we told him we wanted to get the home sold 3 months after Mom passed, he resisted and then filed an action in the Calif Courts for Fraud....we sucessfully Demurred the case, then he filed for probate of Moms estate, but constant hearings, petitions etc because of no Estate (home not in her name). Filed a 850 petition to have the home transfered into the estate, after 9 months, they pulled back and dropped, He now was granted to be Administrator of her Estate and has gotten us to where we are.

I guess in hindsight, our attorney for the BK was smart to list him as a creditor..

The hell of all of this, his Attorney arranged for the initial transfer of this home to us, I paid him the fees to do this, and now he is fighting us what I see as his mistake for not having a trust formally made. He is hiding behind the fact that he could not have a trust completed because Moms mental state and that he could be sued for malpractice. However as stated before, he allowed her to sign over her interest of the home to us and that was OK? He dropped the ball and is trying to cover this in my opinion.

I have reported him to the Ca State Bar as a conflict of interest because I actuall paid him over $3000 for his services to complete the transfer, but he claims that he never had a retainer agreement with me and he was only working for mom. The bar dismissed the complaint and advised me that if a court brings up a "conflict" issue with him, at that point I can refile my complaint. I do not have the funds to bring this action, and just wish some judge would just have the ba@@@ to say it, but they won't.

BooBoo