Trustee wants to know where the money went.

[billf1980]

In a 13, and have made two payments. Now, the trustee wants to know where my money went after a couple of loans I took to pay some bills and get caught up with some stuff around the house. I also used the money to live, going out to eat and partying a bit too much.

I have some receipts, but some I don't have.

Is this common? Can my case not get confirmed because I can't account for some money in my bank statements that went and I can't account for every cent?

big brother is something.

[NoTomatoCan]

How much are we talking about? How long ago was it? I mean, did you take out several thousand dollars at once or was it $50 here, $100 there?

If you took out a $5,000 loan a week before filing, it would be pretty reasonable for the trustee to ask what happened to the money! LOL!

The trustee is likely trying to determine if there is any fraud, bad faith, or hiding of assets.

You answering that you used it to "pay some bills and get caught up with some stuff around the house" isn't necessarily a bad answer depending on how close to filing this was.

Also many folks in BK "used the money to live, going out to eat and partying a bit too much" or some variation of that. For some it was shopping, gambling, bad decisions or just the only option they had at the time. These are pretty standard questions the trustee would ask. They want to get a complete picture of your financial situation leading up to BK.

[justbroke]

I haven't heard of this being common in a Chapter 13. Unless you're in a 0% payback plan, Chapter 13 Trustees are generally much more lenient since you will be returning some dividend to the unsecured creditors.

NoTomato lists some good reasons why this may occur. Otherwise, you don't need receipts and can just claim cost of living.

[billf1980]

How much are we talking about? How long ago was it? I mean, did you take out several thousand dollars at once or was it $50 here, $100 there?

If you took out a $5,000 loan a week before filing, it would be pretty reasonable for the trustee to ask what happened to the money! LOL!

The trustee is likely trying to determine if there is any fraud, bad faith, or hiding of assets.

You answering that you used it to "pay some bills and get caught up with some stuff around the house" isn't necessarily a bad answer depending on how close to filing this was.

Also many folks in BK "used the money to live, going out to eat and partying a bit too much" or some variation of that. For some it was shopping, gambling, bad decisions or just the only option they had at the time. These are pretty standard questions the trustee would ask. They want to get a complete picture of your financial situation leading up to BK.

There is about 12k that is not accounted for, that went to living the high life.

I just don't see how they can dismiss my case for that small amount because I don't have receipts for some travel, gourmet meals, and clubbing.

[MakinMeCrazy]

Hi , My only question is how long ago was this .....6 months.a year.two years?

[billf1980]

Hi , My only question is how long ago was this .....6 months.a year.two years?

1 year, within the 6 month.

don't see how it matters.
if it doesn, I can just refile.

I think

[billf1980]

How much are we talking about? How long ago was it? I mean, did you take out several thousand dollars at once or was it $50 here, $100 there?

If you took out a $5,000 loan a week before filing, it would be pretty reasonable for the trustee to ask what happened to the money! LOL!

The trustee is likely trying to determine if there is any fraud, bad faith, or hiding of assets.

You answering that you used it to "pay some bills and get caught up with some stuff around the house" isn't necessarily a bad answer depending on how close to filing this was.

Also many folks in BK "used the money to live, going out to eat and partying a bit too much" or some variation of that. For some it was shopping, gambling, bad decisions or just the only option they had at the time. These are pretty standard questions the trustee would ask. They want to get a complete picture of your financial situation leading up to BK.

filed about three months ago.

And there is about 12k that I can't account for with receipts from about 6 months ago. Its from travelling and partying. Just bad decision.

I just don't see how that is a problem, now that I have a plan that I can pay back and already have made two on time payments.

I mean, that is why I filed, because my spending got out of control, and I was getting sued for not making payments.

Sure, it was not responsible, but that is what the filing is for. That is why is went into BK, to curb my spending and control my creditors.

It just feels that now I am trying to do the responsible thing, that is, filing. And I am getting micromanged for it.

I expect everything will go through fine, as the lawyer and trustee want to get paid too. Its all a business to them, right? And, I did not lie under oath for anything, so there is no fraud. Rather, just bad decisions that I made and cannot account for properly. It just seems unamerican for them to give me a hard time over a lousy 12k that I can show them what I spent on, when I have a home that is way under, and a job that pays 50 percent less than what I was making, and when those people in power are getting bailed out for BILLIONS!

This world really sucks, doesn't it?

Thanks for you interest in my posts, and for you feedback.

[Flamingo]

There is about 12k that is not accounted for, that went to living the high life.

I just don't see how they can dismiss my case for that small amount because I don't have receipts for some travel, gourmet meals, and clubbing.

They can do anything they want if they suspect fraud and if you were in financial straights in the months prior to filing and took out loans to go clubbing and having a good time knowing you were going to file, you are learning that you probably should have curbed your tendencies to party at that time and not filing BK to do so (the reason you state above that you filed). The trustee suspects fraud in your matter due to the timing of the loans/charges and the fact that you have no receipts. Reality bites hard sometimes; I would discuss the entire situation thoroughly with your lawyer...best of luck to you.

[BKOnce]

-->> I just don't see how that is a problem, now that I have a plan that I can pay back and already have made two on time payments.



That's also a problem there Sir.

[debtinohio]

Like others said, be honest with your attorney and come up with a response for the trustee.

[frogger]

The appearance that you're giving is that you went out and partied down on other peoples money and then filed bk on it. A trustee probably won't be happy with that, just as your debtors won't be.

BK does not give you the right to live it up pre-filing. As debtinohio stated, you need to come totally clean with your attorney and answer the trustee.

[Lissy]

Did I read your post right? You took out a $12k loan 6 months ago, blew the money on travel and partying (or at least a portion of it) and then filed BK 3 months later? If that is the case, I can completely understand why the trustee is asking about it. If you got the loan thinking you could catch up on some bills and avoid BK, then realized you couldn't after the fact, that would be one thing. Not the way most people go, but OK, I can see how someone might try it. But you admit you used the money for frivolous things. You may have a problem with not being able to discharge that particular loan if the creditor objects. Again, this is if I'm reading your post right. Talk to your lawyer ASAP.

[SMinGA]

This will probably not derail your entire case - but could lead to the $12,000 loan needing to be paid back at 100% and not treated as general unsecured debt. If that is the ruling, based on a presumption of fraud, then I don't think dismissing & refiling down the road will change it. It could be made permanently not eligible for discharge = must be paid in full no matter what.

[NoTomatoCan]

It just feels that now I am trying to do the responsible thing, that is, filing. And I am getting micromanged for it.

Yeah, unfortunately that is what the trustee gets to do if they suspect something fishy. We all entered into our CH13s voluntarily, and have to deal with the rules of the game as they are setup.

I expect everything will go through fine, as the lawyer and trustee want to get paid too. Its all a business to them, right? And, I did not lie under oath for anything, so there is no fraud.

You are probably right, it likely will go through, but possibly with some of the caveats others have listed (like maybe having to pay that debt back at 100%). But who knows - this stuff is all very fact specific. As for their being no fraud, you are also probably right. But not simply because you didn't lie under oath. If you were heading down a path knowing you were going to file BK, with no intention of ever paying back that $12k, but took out the loan anyway, quickly spending it, THAT would be fraud. However, it sounds like it was just some poor timing and decision making - not fraud.

One thing on your side is that it can sometimes be difficult to prove fraud. No one knows what you were thinking or your intentions were leading up to BK, so if you had made some payments on that debt and showed some "intent" to pay it back before you filed BK, that generally is enough.

This world really sucks, doesn't it?

Not really. In fact, if this is the biggest curve ball you get in your BK, then that ain't too shabby. You spent $12k shortly leading up to your BK. Your creditor who is out $12k will likely get a fraction of that through your plan. In doing his/her job, your trustee is inquiring about those funds. That seems pretty reasonable.

Who knows where this questioning from the trustee is even going to go. Maybe they are just fishing. Maybe they have some suspicions. Based on what info you have provided, it seems like something most trustees would do.

I wouldn't sweat it too much. As others have pointed out, you can always work something out with the trustee, it may just look different than it does now.

Also, you mention having "made two payments". Does that mean you have been confirmed and made 2 payments, or simply made 2 payments and are awaiting confirmation? I have made 6 payments, and confirmation is still a month away. Until I get confirmed, I expect that anything leading up to my BK is fair game.