Us Trustee Wont Budge! Help

[lost1312]

Hello all. I have been going through a lot with my Chap 7 and NEED advice. The US trustee is trying to dismiss my 7 with alleged fraud. With out getting to winded here goes. In Dec. I bough an expensive vehicle. I went though a major flood this past year that damaged my house and thought I was going to get out of the adjustable arm loan I had with a bad interest rate as well. Long story short, I didnt get the new loan, I got seperated and lost my wifes income. This all happened REALLY FAST. I had to file chap 7 to get away from wage garnishment. The US trustee threw a fit that my car payments were double the allowed amount. He filed the motion 7 hrs before my local state hearing, I think there called 341(?). Now I have tried to just let the car go with the 7, but since I bought it so close to filing there is no way the creditor is going to allow this. Can the US Trustee win this in court, just because of the car? I did not do it to fraud anyone or anything. I could afford the car if my wife and I would have stayed together and I really thought that the house was going to get refinanced. Can the trustee really get my case dismissed just because of this?? Thanks in advance

[DivorceRuinedMe]

I don't think the creditor has a choice whether or not you let the car go back in a 7. If you don't want the car anymore, then stop making the payments and they will repo it. And I'm really not sure how the US Trustee can claim fraud if you are willing to let the car go. Now if you wanted to KEEP the car, then maybe.

Am I missing something? Maybe it's just too early and my brain isn't working just yet.

[lost1312]

thank you for your reply. I want the car to go with the 7, but ford credit will file a claim not allowing it and file paperwork as I got the car just one month before filling. my attny didn't list both my kids, only one. that put me over the means. im trying to get him to amend the paperwork showing I have 2 kids. this would put me well under the means. I will keep the car if its easier as it is my only vehicle, also I can re establish credit with it at the same time. if they insist the car goes, I have no transportation and no chance at a decent vehicle with a decent intrest rate, so im right back to where I started....in debt. the local and us trustees have been on me like white on rice. im as honest of a person as it gets. they make me feel like a criminal. ALL this over bad timing getting a nice car. this is the only thing they are complaining about!

[diviaruba]

With one child, he's over the means test. He also has an expensive car payment, over the standards, recently purchased, which smells like gaming the test to the UST.

By removing the expensive payment, and limiting it to the standards ($478/mo), he's likely getting dinged for a presumption of abuse. He also had totality of the circumstances issues, having made a significant, and I daresay, extravagant purchase on the eve of bankruptcy.

Ford is likely to file a presumption of non-dischargability for this "luxury" purchase - it doesn't just apply to credit cards.

OP, you'll likely get a motion to dismiss or convert from the UST.

BTW, how is it that your attorney "forgot" a child on the first filing of your B22A?

[DivorceRuinedMe]

With one child, he's over the means test. He also has an expensive car payment, over the standards, recently purchased, which smells like gaming the test to the UST.

By removing the expensive payment, and limiting it to the standards ($471/mo), he's likely getting dinged for a presumption of abuse. He also had totality of the circumstances issues, having made a significant, and I daresay, extravagant purchase on the eve of bankruptcy.

Ford is likely to file a presumption of non-dischargability for this "luxury" purchase - it doesn't just apply to credit cards.

OP, you'll likely get a motion to dismiss or convert from the UST.

BTW, how is it that your attorney "forgot" a child on the first filing of your B22A?

After I thought about his case more, I see how it could be considered as fraud. Hyping up the car payment would mean less disposable income. But if he's going to give the car back, doesn't that mean he can't include the car payment in the means test? Or is that the whole thing where some trustees allow you to include surrendered property on the means test calculations and some don't????

And yes, I guess Ford could object saying it's a luxury purchase but it is a secured purchase. They will get the car back. They do get dinged though b/c now the car is considered "used".

Yikes - this is some pickle you've gotten yourself into (and I know it's not your fault.) Hopefully your attorney can help you out of this! Good luck!

[JollyGG]

I guess the imprortant question here is what the motion to dismiss says. If the he wants to dismiss with prejudice or if they want to dismiss without prejudice. It really does make a difference.

If the case is dismissed with prejudice those debts can never ever be discharged and you are simply stuck paying them off.

If the case is dismissed without prejudice than you can refile, get everthing right this time, and get things taken care of.

[diviaruba]

I guess the imprortant question here is what the motion to dismiss says. If the he wants to dismiss with prejudice or if they want to dismiss without prejudice. It really does make a difference.

If the case is dismissed with prejudice those debts can never ever be discharged and you are simply stuck paying them off.

If the case is dismissed without prejudice than you can refile, get everthing right this time, and get things taken care of.

You're missing the point. Amending the means test can be accomplished within the context of his current filing to add the second child, if appropriate. The question is, since he is over the means test median income with one child, would two bring him under?

And then, if the large auto secured debt is disallowed, and he is forced to use the standard, is he back over the median income for family size?

Does a Ford Credit objection to dischargability under the per se rules, if they prevail, void his ability to surrender the vehicle and does that bring the payment back into his means test calculation?

Does his district follow the case law that disallows the deductions for payments on property to be surrendered, and is he right back to the standard (or no deduction at all, since he would not have an auto to claim ownership expenses)?

Problems with his filing can be taken care of. Turning back the clock to change objectionable purchases and the associated "fraud" (with a lower case "f") can not.

His attorney should have seen this one coming from a hundred miles away. I question his competence.

[diviaruba]

This all happened REALLY FAST. I had to file chap 7 to get away from wage garnishment.

Probably too fast. Someone wasn't thinking this through and looking at other remedies before filing.

The US trustee threw a fit that my car payments were double the allowed amount. He filed the motion 7 hrs before my local state hearing, I think there called 341(?).

For edification, the auto ownership standard is $478. Double that is $956. That is a HUGE amount, even if you are median income in the highest income state:

New Jersey $56,151(1) $64,821(2) $83,306(3) $97,131(4)

(# is family size)

[JRScott]

Sounds like you got bad advice from the beginning. The problem here is that your lawyer should have advised you to wait 90 days before filing.

You say your wife left you?

Do you have to pay her alimony?

Who has custody of the kids? Is there any court ordered child support payments?

Also as someone else asked there is a big difference between with prejudice and without prejudice. Better hope without prejudice or it can get really nasty. Wihtout prejudice means you can refile in 6 months. With Prejudice means you cannot refile with most of the debts you listed this time.

You might look at a Chapter 13 if you have to. A conversion now could save you. Then farther down the road say in 6 months or so convert it to a Chapter 7. Ask your lawyer and see if he thinks that is doable.

[lost1312]

thanks for all the replies. Divia, your first post hit the nail on the head. that's exactly what is happening. the second child was not added as I was to the understanding that I could only claim children that I claimed on taxes, but that's not the case. I have shared parenting with my first ex and the children have separate house holds with both of us. we have them the same amount of time. by the time I figured this out, my attorney had already sent in my paperwork. he told me that I was so far in the negative every month with just one kid that the 7 would be fine and not to worry about adding the second child. this whole thing is slowly killing me. I wish you guys knew me. I didn't do this to defraud anyone. I wish the trustees would understand that not everything is what it seems. as for the prejudice issue, im not sure. ill have to look into it. can I find that out on pacer?
To answer the question about the payment being factored in if ford takes it back, I was told no, it can't. so then I can't even claim the allowed amount. I will look into the 13. im not so sure I can make the large payment they normally go for.

[JRScott]

I don't think you meant to defraud, just one of those really bad situations. It's not us you have to convince though its the US Trustee.

Might not be a bad idea to go back and list the other child by amending the paperwork. That might help too.

[lost1312]

Well I read the US trustee's motion to dismiss. It states that "No Abuse is Presumed and no assests", but the totallity of the circumstances (707b) I think is what he sited. He also states that with future tax returns and a normal vehicle payment "I could" pay back some money to the creditors. So I believe he is trying to push me towards the 13 route. I have a meeting tomorrow with my attorney. I will force the issue with filing my second child and see what this does for me.

[CindyLou]

I honestly don't think Ford has a choice but to take the car back. They can, however file a claim for the deficiency balance as an unsecured debt and get their share during a chapter 13 if you are forced to convert.

[Bandit]

I guess the imprortant question here is what the motion to dismiss says. If the he wants to dismiss with prejudice or if they want to dismiss without prejudice. It really does make a difference.

If the case is dismissed with prejudice those debts can never ever be discharged and you are simply stuck paying them off.

If the case is dismissed without prejudice than you can refile, get everthing right this time, and get things taken care of.

Thanks Jolly. I did not know there was two kinds (with/without). I thought there was only one & most people could simply refile in 6 months with no problem. I am not sure how I missed it before but I did.

I honestly don't think Ford has a choice but to take the car back. They can, however file a claim for the deficiency balance as an unsecured debt and get their share during a chapter 13 if you are forced to convert.

That is what it might be. He is seeing the new car payment that could have gone toward some of the bills so, instead of a 7, get pushed into a 13. hmmm

[PaKettle]

What a mess!
First of all I think you should add the 2nd child through an amendment to your petition if you can, surely if you no longer pay for such an expensive car you will have money leftover for creditors... I think you will be forced into a 13 anyway, with the leftover money from not paying the car, but I can't see any way to keep your case as a 7. However I am not an attorney so maybe I'm wrong!