What does this mean? Trustee's Application to Employ Attorney?

[SinkingFast]

I'm not worried about the DOT on the house. It was done exactly as if we had taken a 2nd from a bank. Our attorney did look at all the paperwork and said the Deed was valid.

I looked back at Aimslander's post. . . it appears her problem occurred because the vehicle was worth $10K and the lien was for $7K. With Florida's $1K exemption, she had equity. In addition, it doesn't appear that her mother loaned her the money to purchase the vehicle but rather to help her with some other financial problems. My dad bought the car, this can be verified with the dealership and his bank records. We have a lien for $17K, the purchase price and the vehicle is now worth about $13K. Am I reading Aimslander's post correctly?

That's all the fluff surrounding the situation.

The low purchase price was 2 pronged. Amis bought the car at an Auto Auction. It had some problems but ran. Did you see where Amis documented all the defects to substantiate her valuation for BK purposes??

The transaction took place less than a year prior to filing giving it a "suspicious" look.

That's probably what the Trustee is thinking in your case.

What attny said the Deed was Valid?? The attny that drew up the paperwork or your BK attny??

Look at the situation from a 3rd party perspective. Parents can be generous to their children. Parents of means can be even more generous. But, in a relatively short period of time, Dad coughed up some serious cash for you.

Now the Trustee can flip that around because Dad is an Insider. That's $XK in equity in your house that he/she can go after plus $$$'s for the value of the car.

Pure and simple,........... The Trustee is looking for MONEY.

If your BK attny knew all this "Dad lending you money" stuff beforehand,......... Your attny should have warned you that these transactions would be red flags for the Trustee.

[heather307]

I didn't mean to be "wishy-washy". First of all, my dad is a real estate atty. He had no idea we were filing until just recently. He is the atty. who drew up the paperwork and wanted his money protected--therefore the DOT and promissory note on the house. This occurred 11/06. Second, we have been upfront and honest with our attorney. He and my dad both established that the deed was valid. We have not been shady in any way. We owned our own business and it tanked. This is why we filed BK. We have been upfront and honest with both the attorney(s) and the trustee. We did not attempt to hide anything from the trustee. We were completely upfront. At the end of our 341, the all the trustee said was that he needed to see a copy of the title for the car to verify the lien. The car was purchased early 5/07. We didn't consider filing until towards the end of May. I didn't tell my dad we filed until August. I didn't mean appear to be shady. I have posted on these matters prior to filing for advice. It could have been under my husband's member name--millerc507. Anyone can see we have tried to gather as much info as possible surrounding these circumstances. I simply stated that according to Aimslander's post the transfer did not appear to be at the time of purchase but rather later to help with some financial difficulties.

[HHM]

I think the real estate issue is probably ok, but I think the car transaction is where the most problem is lurking.

[heather307]

Dad still holds title

HHM. . . you asked when he turned over title. He has not. In NC the lienholder holds receives the title. The car is registered to my husband for insurance purposes. . . this prevents any possible liability for my dad. He paid cash for the vehicle--wrote a check. We applied for financing but were turned down and it got screwed up. My dad was originally going to cosign but he really doesn't believe in paying interest so he loaned us the money. I can see why the trustee wants to verify the lien but I would hope the fact that the lien was placed at the time of sale would help the situation rather than it being placed after the fact. We asked our attorney repeatedly if this was a problem. He was not concerned nor was my dad after I told him we had filed. No one mentioned the validity of the lien being questioned. I just hope it is not. It scares me to think my dad could be out $17K and my husband and I not having a car. This is our only real vehicle. I am driving my brother's old car with 185K miles on it. My husband drives about 3000 miles a month for work so he needed a car with decent gas mileage and reliability--hence the Civic. Now everybody has made me really nervous.

[SinkingFast]

Heather,..........

We don't think you did anything shady. Just the opposite. Most "family" deals are never formally documented, much less ever repaid.

Many of us here didn't realize we would be filing BK until the grind of bill paying became so unbearable that we finally sat down and took a cold, hard look at our own personal financial situations.

We were just trying to point out to you how these 2 deals CAN be perceived by the BK Trustee handling your case.

You could have drawn a reasonable Trustee who looked at your situation,......... Saw all the documentation,............ Noted the business failure drove you to file,.......... And let it all go.

Sounds like you've drawn a Hard A$$ who's going to try to go after any monies he/she can. We just wanted you to see the opposition's point of view. Why this has potentially happened to you.

[HHM]

Also too, since the BK is related to a business failure, the trustee could have hired the attorney to review the business.

About the car, I meant when he put your husbands name on the title (not that they signed over title, I know that the lienholder keeps possession of the title). If you haven't been making payments to your Dad for the car, that will be problematic, but if you have been making payments and the title issues were all completed at the time of the original purchase, you should be ok.

[freshstart06]

I wish you all the luck, this is going to be tricky and a long haul. Not many will be able to give you advice but we all will be here for you.