Rule 2004

[Kingxray]

Hi all,

We filed Chapter 13 in WI approx. 5 yrs. ago. The reason we filed was because of a dispute with my father. All other creditors were being paid on time. We were confirmed to pay 39% back to creditors in 60 months. During the BK we reconciled with my father. He also provided us funds to help with the BK. He became ill and asked me to handle his finances. We already had a joint checking acct that was established approx. 15 yrs. ago. He also gave me power of attorney. I deposited all the checks he received from the trustee into the joint acct. that we shared. Unfortunately, he passed away in June. We still had 5 months left on our Chapter 13. We completed our payments and I continued to deposit checks from the trustee into his account. At the time of our audit for discharge they discovered the change of address I filed a year earlier to have the trustee's checks sent to our home. Our lawyer received an email questioning this and we provided a death certificate and explanation. Obviously she was not satisfied with our answer because she filed a motion for examination Rule 2004. She wants to examine all of my dad's assets, bank accts., real estate, car, etc. She claims it is property of the BK estate. We are objecting to the motion but I have a feeling we won't be successful. I believe she wants to take the money from my dad's estate and pay all the creditors 100%, which my dad is approx. 70% of the that. I want to dismiss our case and make a deal with the remaining creditors because I don't see us winning this case. Anyone have any thoughts on my idea? I am an only child and my father left no will. Thx in advance!

[LadyInTheRed]

Keep in mind that if you dismiss the case, all accrued interest will be added to your debt. There is no guaranty that you will be able to settle with creditors, especially if they think you have assets they can get to if they get a judgement.

I don't mean to scare you, and I have no expertise in this area, but you may be guilty of bankruptcy fraud by having those checks directed to your address instead of informing the trustee of your dad's death. Dismissing your case will not make any fraud accusation go away and I doubt it will make the 2004 exam go away. Having the trustee pay off your creditors 100% and avoiding prosecution could be a best case result. You really need to sit down with your attorney and discuss your options, including just paying enough to the trustee to pay off your creditors 100% and walking away before you spend more in attorneys fees than your existing debt.

[Kingxray]

I changed the address a year prior to his death as he had moved from his previous address and mail was no longer going to be forwarded. My argument is that I (nor does our lawyer) believe may dad's estate is property of the bankruptcy estate, as the trustee is alleging. I deposited the remaining 5 checks after his death into his acct because I was waiting for it to be determined if the estate was going into probate. If the trustee took control of the estate, she would have to pay me the majority of the funds from the bankruptcy, as I am the sole survivor. I don't understand what she is trying to achieve. I certainly was not trying to do anything fraudulent. This trustee has scrutinized our case from the very beginning. I have yet to win a battle with her but I'm not lying down on this one!

[dmc-2008]

I am not sure I see the bigger picture but if I were to inherit any money the trustee can take it and apply it to creditors!

I want to sell a book but I wont even try (its so far from being done anyway) until this bk is discharged cause it would be fair game right?

[spidge]

Is the trustee assuming he lived with you and thinks his info and income should have been included in the bk13?

[Kingxray]

We are not exactly sure what the trustee wants from us. Our lawyer is going to try to find out. The trustee is aware that he lived with us for a short while.

[despritfreya]

The problem you face is that property of the bankruptcy estate includes ALL property acquired after the case is filed. The Trustee is looking at your right as an heir to your dad's assets upon his death. There is a conflict in the various jurisdictions as to whether or not inheritances a debtor becomes entitled to after a Plan is confirmed must be turned over to the Trustee. Google "11 USC 1306(a) and inheritances".

As to your wish to dismiss, I doubt such a motion will be unopposed. The Trustee will assert that the Motion was filed in bad faith. Since your dad held 70% of the claims why not think about settling with the Trustee? Assuming your inheritance was enough to allow for payment of all filed claims, put in enough $$ to pay the other 30% plus the Trustee's percentage. Depending upon the amount that would be, it may be cheaper than litigating the issue of 11 USC 1306 vs. vesting under 11 USC 1327, if such issue has not already been resolved in your jurisdiction.

Des.

[Kingxray]

The problem you face is that property of the bankruptcy estate includes ALL property acquired after the case is filed. The Trustee is looking at your right as an heir to your dad's assets upon his death. There is a conflict in the various jurisdictions as to whether or not inheritances a debtor becomes entitled to after a Plan is confirmed must be turned over to the Trustee. Google "11 USC 1306(a) and inheritances".

As to your wish to dismiss, I doubt such a motion will be unopposed. The Trustee will assert that the Motion was filed in bad faith. Since your dad held 70% of the claims why not think about settling with the Trustee? Assuming your inheritance was enough to allow for payment of all filed claims, put in enough $$ to pay the other 30% plus the Trustee's percentage. Depending upon the amount that would be, it may be cheaper than litigating the issue of 11 USC 1306 vs. vesting under 11 USC 1327, if such issue has not already been resolved in your jurisdiction.

Des.

Thx much. That explains why our lawyer felt that my dad's estate was not the property of the BK estate. He's objecting to the motion. That will buy us some time to decide what to do. Making a deal with trustee may be in our best interest considering that when we filed our BK she wouldn't allow my car as a deduction (even though I just spent $1100 in repairs). My husband had a company car. I had to claim that I was a pedestrian and that we owned no cars! This was also a conflict in our jurisdiction and someone took it all the way to the Supreme Court and lost. Crazy stuff these BK laws are, right!