Section 2004 Examination and possible objection to discharge

[AbbeyA]

Very much in need of advice here!!! So our creditor filed ANOTHER motion to extend the time to object to discharge!!! They did not file a motion to object, just a time extension. They want until June 30th. Here's what they've done so far ... they first said we were hiding assets -- proven to be incorrect. Then they sniffed around to see if dh embezzled money out of the company -- again proven to be incorrect. Now they are basing their time extension on trying to investigate if there was any kind of fraud on the initial business loan documents. This is the biggest bunch of bs I have ever heard! They are trying to find something/anything to make the debt non-dischargeable. I am so pissed I don't know what to do with myself.

They had a 90 day time extension the first time and got the 2004 exam. They got their order to compel us to turn over documents -- which we did. They got an additional time extension of 45 days. We had the section 2004 exam/deposition with the lawyers, which was 4 days before the last day to file an objection. At that meeting, they asked for more stuff, which was NOT in the motion to compel. We gave it to them as there is nothing to hide. They have nothing. Now they file another time extension!!!

If the judge grants their time extension I don't know what I am going to do. Any advice here? Our lawyer will fight the time extension, but he said it is only to June 30th and the judges usually grant them, but for a 3rd time??? Our attorney is, still is not concerned about discharging the debt, blah blah blah ... we are bankrupt, we don't just have thousands of dollars laying around to keep paying our lawyers. I know this is going to cost a lot of $.

Any moderators here that can comment on this? When this is over, I want to sue this bank for harassment.

[justbroke]

Your attorney(s) needs to be more aggressive in fighting any new motion to extend. The motion to extend is only to allow a creditor or Trustee time to investigate a particular claim. That the creditor is now pursuing another "theory" that there is fraud, should be used in any objection or opposition to the motion to extend. I would think two extensions totaling over 135 days, is more than enough time, when you include the additional 60 days from the 341 meeting (that makes it over 6 months or 180 days).

Hopefully your attorney is aggressive enough and mentions the 2 extensions and plenty of time for the creditor to have exhausted their need to review.

[keptdigging]

Sounds like a classic case of harassment and bad faith to me. Hopefully the judge will see it that way.

[AbbeyA]

Do you think the judge will grant the time extension? Now that I have read the motion, the basis for the time extension is that they say they still need more time to examine our finances -- there is nothing about fraud in the loan documents. We submitted tax returns that were part of the motion to compel -- dh had a business but was not an "employee" of the business. B/c of the business, his salary was submitted on a K-1 statement and not a regular 1040. The bank asked for tax return statements -- dh forwarded what he got from the accountant to our attorney, who sent it to that bank's attorneys. The tax returns did not have the k-1 statements attached so they are saying that they need to scrutinize our finances more since our tax returns don't reflect dh's income. You would think that attorneys representing banks who make loans to businesses would have some knowledge of how business owners file their taxes, but they really had no clue and were hinting that dh evaded federal taxes for those years he had the business. This bank held the business bank account, so they know exactly what dh paid himself over the years. AND the accountant that filed the business taxes and personal taxes was the accountant that the bank required him to use. Grrrrrrr, this whole thing pisses me off. Thoughts? The motion for the time extension is to be heard on June 4th.

[justbroke]

If presented correctly, no judge should grant yet another extension. I have seen debtor attorneys stipulate to an extension, which is dumb I think. Fight the extension.

[AbbeyA]

I typed up my response to their points in the motion and sent it off to our attorney. He says he's going to fight it but to expect that the judge will grant the extension since it is only 30 days. I need to figure out a way to get this out of my mind as it's consuming me. Everytime I tell myself that it will be over by xxx date, it goes on and on and on... OK, enough of the pity party - at least I know all of you are on our side! Thanks for listening to me whine over this mess of a situation, I'll keep you posted on what happens next Friday.

[ColoradoBell]

I understand your frustration and feelings of being victimized...living the same feeling for over 5 years now. You've rec'd good advice tho: try to stop thinking about it and letting it rule your life. It's unfair and unjust, but it seems that as long as someone is making money off of you (their attorney's and even your attorney)that the paper shuffle never ends.

Take a walk, make love, drink wine, cook a gourmet meal and forget about them.

[keptdigging]

If the judge grants the extension it is because he sees that, objectively, 30 days is not much difference. It DOESN'T mean they have a case. Remember that.

[AbbeyA]

I know, they don't have any case at all ... just tired of waiting for all of this to be over and move forward. I have a hard time really letting myself think positively and move forward with our lives when this bad chapter of our lives can't be closed yet.

[Universal]

The bad chapter will close in due course. You sound like you have done everything on the up and up. You have every reason to be proud of that. The opposing counsel is probably billing by the document and by incremental time. At some point the Judge will say enough is enough. You are really an inspiration for staying the course and I bet will have some excellent advice for those who follow.

[AbbeyA]

OK, so as predicted, the judge granted their time extension to file an objection to June 30th. The judge did say that this is absolutely the last time extension they will receive. Ugggggggg, not over yet ...

So for those of you with a legal background -- they can't file an objection without evidence of anything, right? They can't say, we performed the Section 2004 exam but we still believe they are hiding assets - right? They can't say, there is no evidence of embezzlement of money/fraud from the business, but we believe that it happened - right? What a nightmare. I can't imagine they would bring this to an AP without anything behind it. Thoughts?

Do we have any recourse after this is over with this bank? We didn't actually talk with our attorney, he left a message as we weren't home. We'll talk to him on Monday and find out more.

[MSbklawyer]

OK, so as predicted, the judge granted their time extension to file an objection to June 30th. The judge did say that this is absolutely the last time extension they will receive. Ugggggggg, not over yet ...

So for those of you with a legal background -- they can't file an objection without evidence of anything, right? They can't say, we performed the Section 2004 exam but we still believe they are hiding assets - right? They can't say, there is no evidence of embezzlement of money/fraud from the business, but we believe that it happened - right? What a nightmare. I can't imagine they would bring this to an AP without anything behind it. Thoughts?

Do we have any recourse after this is over with this bank? We didn't actually talk with our attorney, he left a message as we weren't home. We'll talk to him on Monday and find out more.

They could, I suppose, file an objection without any evidence of their claims but it would likely get them or their lawyer sanctioned. But to answer your question, no. Suspicions, hunches and gut feelings alone aren't enough to support an objection to anything in any federal court. You have to have evidence. Real, objective, credible evidence. If you don't have any, you lose.

That's the way it's supposed to work, anyway.

[Brazzy]

The objection itself comes with no evidence in itself. It simply will be a complaint with what they intend to prove. From there it turns into a long drawn out series of nonsense BS. None of which you cannot worry about. As for the extension of the deadlines its not uncommon. They dont want to come at you with nothing and at a glance on paper to them it probably looks fraudulent. The thing is that there is a creditor's employee who is working the account due to the BK. They originally see what could be fraud, but they need to look into it further. Since proving fraud is not easy, they need the full cooperation from other representatives of the bank, their attorney, local branches, and an ass load of other people who dont give a shit and have the "its not my job" attitude. With that said, getting the necessary information to make the balls out determination to pursue an objection to discharge takes time. The extension is VERY common and nothing to be worried about.

Your worst case scenario if you did nothing wrong is that they do file the objection and cause a long costly process to you. At which point you're attorney will eventually turn to you and say something like to the fact that you could either settle it and make it go away or roll the dice and run the X% chance in court and losing entirely. They will probably explain to you what the evidence is and how strong it is, but there is always the chance of getting the case assigned to a judge who portrays an insurmountable level of douche baggery and that there is risk.

Odds are the 2004 exam and extending the DL is just a way to buy time to find the evidence they are looking for. Them doing what they are doing means they have yet to find what they are looking for, and thats good for you.

[AbbeyA]

I really can't believe the amount of "legal" bs allowed in court proceedings. As one who had no experience with the law/who had absolutely zero interest in anything to do with it, I can't believe how things actually play out within the system. It is shameful. I will say it again, my dh did nothing wrong. This was a business debt which he personally guaranteed. The business was run on the up and up. The bank itself shut the business down, even thought they had never missed a payment in 4 years. They called the loan due to the collateral securing the loan being upside down (stock account that was devalued from when it was first pledged, and housing appraisals down due to the housing market) and a very poor cash flow due to a 40% drop in revenue b/c of the recession.

Never in a million years would we have imagined how badly this has turned out. DH held up his end of the bargain - his collateral stock account was taken to pay down the loan. Due to the housing market, the equity in our home that was "pledged" is no longer there -- the lien exists but there is nothing there for them.

Sigh ..... I hope that on the 30th I am doing a happy dance. Getting very discouraged and beaten down by all of this. We have young children to raise -- what the bank is trying to do is secure that our kids will never have anything, will never have college funds, and dh will forever be indebted to this bank due to the business failure. Again, the amount of money is very significant.

[MSbklawyer]

I really can't believe the amount of "legal" bs allowed in court proceedings. As one who had no experience with the law/who had absolutely zero interest in anything to do with it, I can't believe how things actually play out within the system. It is shameful. I will say it again, my dh did nothing wrong. This was a business debt which he personally guaranteed. The business was run on the up and up. The bank itself shut the business down, even thought they had never missed a payment in 4 years. They called the loan due to the collateral securing the loan being upside down (stock account that was devalued from when it was first pledged, and housing appraisals down due to the housing market) and a very poor cash flow due to a 40% drop in revenue b/c of the recession.

Well, it's certainly an ordeal, I can understand that. But even though you've truly done nothing wrong, you have to understand that the bank does not have to take your statement that "we've done nothing wrong" at face value. They're entitled to look into it, turn over leaves and look under rocks. They have a legal duty to their shareholders to minimize any losses and to make absolutely sure that they're not being played. That's never a pleasant experience, to be under a microscope like that, but that is the adversarial system.

Sigh ..... I hope that on the 30th I am doing a happy dance.

I hope you are too and in all liklihood you will be.