Just Filed, but the 341 is less than 3 weeks on April 4!

[Retired_Broke]

I just filed, am nervous like all of you, but especially because the 341 is on April 4, and the Trustee is an ex-FBI agent!
My case is more complicated than some because it involves income solely from a business partnership. Even though my attorney has assured that it is a no asset case, she never the less had me bring all the business tax info for the last 3 years, the business bank statements, and a complete list of the business assets.
I thought that partnership assets were exempt from bankruptcy. The law says they are. Anyone know about this?

Also, I have about $80,000 in unsecured credit card debt. One of them is a $20,000 cash loan from a loan company, taken out in several thousand dollar increments over the last 5 years, the last one a $1000 draw in January 2006.
But this company has been threatening me with application fraud. They asked me for my income initially, and I told them what it had been. Obviously, my income has declined since then due to business problems. But even so, I gave them the business gross profit as income. It included "unstated" income such as insurance policies paid on my behalf, travel expenses paid by the business, etc. My 1040 stated income was somewhat less.
Can they actually prosecute me for overstating income? They never asked to see proof of income. It's almost like they were setting me up. They must have known that I was not able to borrow with a low interest rate, that I was potentially a risk, or why else would I borrow from them at 23%?

I'm going to be retiring broke anyway, but loan fraud? I think I'd rather just end it all first.
Please help.

[Spartan]

No need to jump out of the window yet...

1. The business partnership is exempted. So the partnership cannot be touched. However, the trustee can get a charging order against any distribution from the partnership. That is not a very pleasant prospect for the trustee as with the charging order, also comes the tax liabilities. Nevertheless, you may still get a charging order.

2. Typically, income fraud in a bk case, is not something you will be prosecuted for. What it means is, if they prevail, the debt will survive the discharge, and you will have to repay it.

[Retired_Broke]

My share of the business income, such as it is, amounts to 17%, or about $1500 a month at present, pre-tax. You mean the Trustee can take that? It barely meets basic living expenses. As to a distribution of assets, he can have them -- and try to deal with my business partners, who would probably take HIM to court for disrupting business operations.
He couldn't try to force the other partners to buy out my share to raise cash for the creditors, could he? I don't see why they should be forced to pay my debts.
As to the credit application problem, it seems to me that so-called "creative" mortgages with stated income, as well as stated income on personal loans with a loan company, invite abuse. The loan companies know they will get far fewer loans approved if proof of income is required, so they purposely invite fools like me to overstate income, and it's all done with a wink and a smile.
They record the application process, and then like loan sharks, threaten dire consequenses when we can't pay. They start out with 23% interest, which is bad enough, and then when you get into them for a sizable amount, they up the interest to 29%. And then all the other sharks, like MBNA/Bank of America, Chase, HCSB, raise their rates and increase the monthly minimums simply because I took out a loan with Beneficial and had a high balance, thus making it impossible to pay them.
As recently as last August, my FICA score was 720. Never late for 15 years.
Now this.
Where did the people running these business get their education? Watching "The Sopranos."

[keepmine]

Have you told your attorney about the issues the loan company raises?

[Retired_Broke]

Keepmine, yes, I brought all this up with my attorney before I filed. She said they all threaten when in the collection/pre-bankruptcy process, but usually don't follow through. And that we could deal with it if, and when an adversary is filed if something couldn't be worked out with them.
But I believe she dismissed the threat from this loan outfit too easily.

When it became increasingly obvious that my income wasn't going to cover these credit card payments, I went to the manager of the local loan office, told them the situation, and tried to get them to re-write the loan, with lower monthly payments. No deal. After a number of phone calls, and finally a sit down meeting, they said they might be willing to do something for me.
Put a second mortgage on my home, with an initial interest rate of 14%, and no assurance that it wouldn't go up. A variable 14% that they could raise anytime.
It was a take it or leave it from them. Laced with the "offer" were threats of how aggressive their collection department is, especially with bankruptcy "crooks" and a reminder that they had my application meeting on tape.
I walked out feeling I was being strong armed into something that was not in my interest.
Then the phone calls from their collection department began, with quiet reminders of the taped and recorded application.
What do you think will happen?
I'm very worried, can't sleep, and at this point think I could end up loosing my modest home.
This all seems to me to be bankruptcy protection designed for loan sharks.

[keepmine]

Got no idea what will happen. What's done is done. I agree with your lawyer. All you can do is wait and see what happens.

[JollyGG]

Since you have already filed this company should not even be talking to you they should be taking to your lawyer. Ask your lawyer to send them a letter reminding them of the automatic stay and directing all coorespondences to the lawyer.
They are probably contacting you instead of you lawyer because they know they can intimidate you. The lawyer knows the laws and is alot harder to scare.

[Retired_Broke]

I'll keep you informed of what happens.

[whatamess]

Hello ..
I sent you a private message...
WAM

[Retired_Broke]

Contacted my attorney today. She said that perhaps I should be worried, a little. It seems that the word is out that HFC/Beneficial as well as some of the other lenders like Chase, are feeling the pinch of too many bankruptcies.
She has asked me to furnish her with a complete rundown of my side of the application for the initial loan with them.
She did say, she hadnt' heard from them, but better to be prepared.
(I think she MUST have heard something, perhaps seconhand, that prompted this.)
Anyway, it's only 2 weeks, and 1 day to the 341.
Hope it all goes well.

[SinkingFast]

In your position, I'd rather be prepared for a "Worst Case" scenario and be pleasantly surprised, than to be blind sided.

Still,.............

And this is just my humble thoughts,...............

They're trying a "strong arm" tactic to scare you.

I believe your attny could mount a strong argument that the Lender did not practice due diligence.

WoooHooo for them that they recorded the phone conversation. They were making a "higher risk" business loan. You provided them a good faith estimate of income based on valid numbers which you've detailed here and could reproduce if needed. It's not like you looked up in the sky and saw numbers in cloud formations.

Everyone knows business projections are just that. Projections. The business may perform better or worse depending on,.......... The weather,......... The market,......... The price of Oil,........... You name it.

Once you provided the numbers, it was up to the Lender to follow thru and Verify. If they didn't,........... That's their problem. Not yours.

JMHO.

Best of Luck to you. Try to keep the nerves at bay. And keep us informed of your progress.

[Retired_Broke]

A quick update:
My attorney called and said that she received a notice of intent to dispute about $700 that I owe HSBC who bought an old Sears Home Improvement loan. It was originally $3,000.00 when I put in floor covering about 5 or 6 years ago.
But the important point here is that HSBC owns Beneficial/Household where I borrowed the $20,000 with "mis-stated" income.
Can they somehow try to get a security interest through the old Sears account, and wrap both loans into one since it's the same company now?
My attorney said she was very surprised to get the letter of intent from them. Said it is very rare. They are up to something.
341 is next Wednesday.

[SamanthaJones]

The more bankruptcies are filed, the more notices of intent.

Still- it costs the creditor money to proceed with legal maneuvers. I think you (and everone else that is suffering anxiety and having nightmares) might want to consider talking to your doctor about a few Xanax fopr temporary acute stress and anxiety to tide you over.....There is no reason to suffer.

[SinkingFast]

A quick update:
My attorney called and said that she received a notice of intent to dispute about $700 that I owe HSBC who bought an old Sears Home Improvement loan. It was originally $3,000.00 when I put in floor covering about 5 or 6 years ago.
But the important point here is that HSBC owns Beneficial/Household where I borrowed the $20,000 with "mis-stated" income.
Can they somehow try to get a security interest through the old Sears account, and wrap both loans into one since it's the same company now?
My attorney said she was very surprised to get the letter of intent from them. Said it is very rare. They are up to something.
341 is next Wednesday.

Most likely, HSBC won't represent themselves unless you happen to live near where their Central Offices are. All the big Creditors have attnys on retainer around the Country to work on their behalf processing Objections and Adversarials. The attnys get a %'age of what they win. It doesn't seem likely that HSBC would come after $700. It's just not enough money to hire an attny over.

Generally 3rd party agents that buy old accts don't have the underlying documentation to prove a claim. Someone like Bass and Associates buys up old Circuit City debt post BK and comes asking you to pay. They tell you how much $$$'s you owe, but B&A has no clue what you bought, when you bought it, or how much you paid. All they know is what you owe. They rely upon the debtor's own fears to tell on themselves and pay.

That may not be the case with HSBC buying up old Sears home improvement debts. HSBC may have gotten the supporting documentation in the Buy-Out.

So, while $700 isn't enough to come after,.............. $20,700 is a whole different ballgame.

This would seem to be a wait and see situation. Don't fret over bridges you haven't crossed yet. HSBC could just be blowing smoke to rattle your cage. But be prepared in case they do come after you. Which sounds like your attny is already doing.

[Retired_Broke]

Major Update:
I attented the 341 hearing today. It was continued for one week by the bankrupcty trustee. He (the former FBI agent) wants to get some money out of me by claiming that I have a potential income of $18,000 over the next 12 months from distribution of assets from the partnership. Also, he is questioning $12,500 in claimed exemptions on property. It's a complicated situtation.
The point is: if I am willing to go along with his proposal, he will be willing to drop the quest.
If this sounds like blackmail, it's your call, not mine.
And we are supposed to think of govenment officials as non-partial and uncorrupt?
Like always, it's all about the money and how much they can bleed out of us.
In colonial times you were indentured, or imprisioned. Now they threaten you with loss of puny assets, and endless legal fees.
I will keep you up to date as this case is resovled.
My attorney proposes that I pay the blood money to keep this from dragging out for months on end.
I quess she is right (at least offering the most practical solution) and I will go along. No principles here.
Our government is corrupt from top to bottom.
Who wrote the current bankruptcy law anyway? Weren't they credit card and bank attorneys? Didn't they sit in the offices of U.S. Senators like Biden from Delaware (the home of SO many corporate banks like Chase) and write the law as they wanted it?
And aren't they, the Senators, all on the take?
I can't post more now. Too upset.