Chapter 7 Sarasota personal property audit

[NightAngel]

Hello,
My wife and I are getting ready to file a joint chapter 7 case. We are using an attorney thru legal-aid. The attorney is a very nice lady, but only done about 10 cases for chapter 7 so far. She decided that we needed a personal property and vehicle audit before we file. The justification is she feels I over valuated our personal items, and both of our cars are paid for so she wants to get them protected. I agreed mainly because i would love to keep both cars, a 2002 grand caravan, and a 2006 Hyundai santa fe. Both are paid for, but high mileage and in poor to moderate condition needing a lot of work that i just cant afford to have done.
So the guy she had come out (Robert Bonnell) was a very nice man and seemed like he knew what he was doing. When he called to schedule it with me, he said the appointment before mine was a trustee appointed account and the homeowners weren't cooperating.. This seemed important to me because the trustee's must know who he is and use him too.
He told me before leaving he'd have the report back soon, and both cars would probably be under $1000 each, so they'd probably be exempt.

My question and concern is after we have the 341 meeting, can/will the trustees reject the audit and order one of their own? I have nothing to hide, but I'd hate to go thru it again!
I'm also worried that filing this late into the year they will be wanting next years tax return (usually around $2000) and I really worried they will try taking my vacation time. I have about 140 hours accrued vacation time that doubles as my sick time at work. I have Multiple Sclerosis and on FMLA for approved leave of work when im unable to. Those vacation hours are the only thing that keep the paycheck the same size when i do miss a day or two of work.

I'm hopeful this will all go well, and I've shared my concerns with my wife. Shes been very supportive, but we also have 2 children under 10 and I try to handle more than I should without talking about it.

Info about me..
My wife and I are in our 30's, married filing joint chapter 7, I work full time and wife doesn't due to a medical condition ,NOT on disability. Gross income around $46,000.
Own our home and using homestead exemption, We live in the Sarasota area, have 2 boys under 10, & 2 loving middle aged dogs we adopted.

Thanks for reading, and appreciate any feedback or advice!

[justbroke]

My question and concern is after we have the 341 meeting, can/will the trustees reject the audit and order one of their own? I have nothing to hide, but I'd hate to go thru it again!

It's hard to gauge what any specific Chapter 7 Trustee would do. You may not know this, but Chapter 7 Trustees are chosen from a panel of everyday professionals that have enrolled to become a Chapter 7 Panel Trustee. They are not all attorneys, but most are either attorneys or CPAs. They have many different personalities and some are more firm than others.

Here's some background on this appraisal phenomenon in the Middle District of Florida. The problem has always been that Florida's bankruptcy exemptions do not reflect today's property values. They were set tens of years ago and are so basic. Here are the basics, without repeating them all; unlimited homestead exemption, $1,000 personal property exemption, and a $1,000 vehicle exemption. That's generally it for real and personal property (excluding things like tools of the trade and other similar items). If the constitutional homestead exemption is not used, then each debtor receives an additional $4,000 wildcard (known as the unused homestead exemption).

From a prior 2011 thread that I posted on this topic: In any event, your attorney perhaps should have briefed you more. The fact is, if you use the homestead exemption, almost EVERY Trustee in Florida is going to be looking more closely at your exemptions. It's quite easy to "guess" that a person with a 2,200square foot home has more than $1,000 worth of personal property in that home.

It came down to this. Back in 2007-2011, approximately, Middle Districts figured that people were claiming the homestead exemption to keep their homes but somehow only had $1,000 ($2,000 if married and filing jointly) in personal property scheduled in their filing. So these Florida Trustees started sending appraisers to the homes. This became popular because there was an ongoing argument whether a person was "using" or "obtaining the benefit" of the homestead exemption even when they didn't have equity. That was finally decided by the Florida Supreme Court in 2011 that there is a difference, so the Trustees backed off... somewhat. Unless you're actually "benefiting" from the homestead exemption by actually protecting property, you receive the entire amount ($4,000 per debtor). If you only use a portion of the homestead exemption then you could claim up to $4,000 per debtor.

I'm also worried that filing this late into the year they will be wanting next years tax return (usually around $2000) and I really worried they will try taking my vacation time. I have about 140 hours accrued vacation time that doubles as my sick time at work. I have Multiple Sclerosis and on FMLA for approved leave of work when im unable to. Those vacation hours are the only thing that keep the paycheck the same size when i do miss a day or two of work.

You can exempt the tax refund if you have enough exemptions leftover after exempting all your other property. The problem is that I don't know if you'll have enough exemption money left to protect your furnishing and other property. Your cars should be okay since you get $1,000 per vehicle (up to two vehicles).

My wife and I are in our 30's, married filing joint chapter 7, I work full time and wife doesn't due to a medical condition ,NOT on disability. Gross income around $46,000.

It reads as though you are certainly under the median income for Florida and everywhere else. You should not have an issue receiving a discharge in a Chapter 7.

Own our home and using homestead exemption

The real question is how much equity do you have? Any portion of the unused homestead exemption can apply to "any" property as a wildcard. So you could receive up to $8,000 ($4,000 each) of the unused portion. If you have more than $8,000 in equity, then you'll have very little left to protect other property.

You will make it through this. Hopefully, if you do have "exposed" (non-exempt) property then your attorney can help you fashion an argument for the Trustee to negotiate... or maybe the Trustee will just not care. There are just too many factors to speculate since it is really up to which Trustee you are assigned and how that Trustee feels about your case.

Best of luck to you!

References: "Where a debtor in bankruptcy elects not to claim the constitutional homestead exemption and the trustee’s administration of the bankruptcy estate is not otherwise obstructed by the existence of the homestead exemption, the debtor does not receive the benefits of the homestead exemption and may claim the statutory personal property exemption of $4000.” Osbourne v. Dumoulin, 55 So.3d 577 (2011)

[NightAngel]

Thank you justbroke !
We had our home audit and went well. The lawyer finally filed the beginning of the week, and the home audit went well. We ended up with about $250 worth of personal items that couldn't be exempt. The lawyer is hopeful that the trustee will abandon the small amount, but if not I will try and come up with the money some how.

We have our 341 meeting the end of December and I'm excited at the idea of a fresh start!! Hopefully the meeting goes well, we are both very nervous about it.
My question right now, and the lawyer wasn't able to give me a clear answer is this.
We were approved to make the filing fees in over 3 payments. It states must be paid with money order, or cashiers check and mailed to the trustees office.
I have the dates on the paper work but I'm nervous about how many days ahead i should be mailing these payments to ensure they are received on time. Also, how do i know if they have been received? I cant really afford to even be making these payments, and would hate to have the mail "lost" and be forced to make a double payment.

I know I'm probably worrying about little things, but it's in my nature. If it can go wrong, it usually does unfortunately.

[justbroke]

My question right now, and the lawyer wasn't able to give me a clear answer is this.
We were approved to make the filing fees in over 3 payments. It states must be paid with money order, or cashiers check and mailed to the trustees office. I have the dates on the paper work but I'm nervous about how many days ahead i should be mailing these payments to ensure they are received on time. Also, how do i know if they have been received? I cant really afford to even be making these payments, and would hate to have the mail "lost" and be forced to make a double payment.

If you re-read the order granting you the ability to pay the filing fee in installments, it should say next to those dates that it is due "on or before" that date. You should also double check with your attorney whether this fee is to be paid directly to the clerk of the court and NOT the Trustee! (Case filing fees go to the clerk of the court.) A failure to pay on time may result in your case being dismissed for failing to pay the installment fee. I can't even guess whether there would be a hearing prior to a case being dismissed.

If you paid the $110 suggested "downpayment" (first installment) then your remaining payments are $75 each over the next 90 days. Personally, I would not let it go beyond the 90 days because you want to get your discharge, which is typically available approximately 90 days from filing. I would make sure I mailed these payments with sufficient time to reach the clerk's office. These dates should be 30 days apart.

You bring up a point on not being able to make the three (3) $75 payments. You will need to find a way to do this otherwise your case will be dismissed. Did you pay your attorney already or is this pro bono? (I, rather hesitantly, insist that you borrow the $225 remaining in order to not have your case dismissed.)

You can always call the Clerk of the Court to see if the payment was received. You could also check in PACER but I don't usually recommend such because people run up large bills when they abuse the search features in PACER.

[NightAngel]

Thanks for the quick reply justbroke.

My apologies, you are correct. I just checked and the paperwork says payments go the to clerk, not the trustee. The court ordered us to make 2 $75 payments (December, and January) and a final payment of $185 (February). I'm not sure why they structured the payments in this manner, its definitely not what we requested on the form to the courts.

I hadn't thought of calling the clerk to confirm payment was received, that's a great idea!

I have so far decided not to register with PACER for the exact reason you mention. My wife would freak if i ran up a bill we cant afford on their system.

[NightAngel]

Hey everyone,
My 341 meeting went well, and didn't seem to be any issues until this morning. I woke up to 2 emails from my attorney.
1st was "The Trustee hereby gives notice of recovery of assets in the instant bankruptcy case."
and the 2nd " Notice fixing time to file proofs of claim - 90 days"
The 2nd email was easy enough to figure out, my creditors have 90 days to file claims for payment from the chapter 7. It's the 1st that's killing me, It doesn't say what "assets" the trustee plants to recover from me or my wife. I immediately sent the attorney an email inquiring for more information, but I'm sure it will be Tuesday before I hear anything. I can't possibly imagine what the trustee plans on taking from us. We were due to close mid February, so maybe our tax return? If it's the tax return, i can live with that.
Definitely freaking out here!

[Vandervecken]

NightAngel, don't freak out! For some reason, these updates from trustees always seem to happen on weekends and holidays (grumble, grumble.)

In your schedules, did you declare that you expected a tax refund? If so, it's probably what you suspect, the trustee will recover the refund from you. Otherwise your attorney will let you know.

Again, don't panic this weekend. This process is a slow-pace, not a sprint. You'll get through it!

[NightAngel]

Vandervecken,
Yes, my wife and I file married - separately, (for student loan protection) and combined we usually get around $3000 back. Our lawyer listed the tax return on our schedule with a blank value, and we had nothing left to exempt it with anyway. I did hear back from my lawyer a few hours ago after i questioned what the trustee was going after. She said she knew no more than i did, she got the same notification. She did say though, the trustee hadn't objected to any of our exemptions so far, so shes thinking its the tax return too.
We were suppose to be done with this in mid February, but now the creditors have until early April to file claims for payout. I'm assuming this will delay our discharge too?
Trying to breath and not freak out now...they move at a lot slower pace than I like