Received Objections from U.S. Trustee Border. Please help!

[Prideofjc]

Hello, I filed a chapter 7 BK on March in Virginia. It seemed like everything was going fine, but I received a objection from the U.S. Trustee Border last friday.

From what I heard the objection includes 6 things.

1. Did not list any taxes debts.
-> I didn't list them because they were not dischargable anyway. Also, I already called a IRS office once and told them I will make a repayment plan after my BK discharges.

2. Did not list any debts to employees.
-> I had 5 employees that were not supposed to work in the U.S. They were illegal aliens. They were never on the payroll. I thought it could be a problem for both parties(me and them) so I decided not to list them on the schedule. But I told the employees that I will pay them after bankruptcy discharges through my aunt.

3. I did not list a debt to this person.
-> I burrowed money from her like 4-5 years ago, but everything was all taken care of. I paid off everything long time ago. I don't understand why and what kinda proof they have, to say I owe her money. She might have few checks I gave her long time ago but I never signed or anything on a paper. Also, if I really owe her any money, why would I not list her on the schedule? -_-

4. Unexplained 2 SBA loans.
-> 1 SBA loan I was scammed by this person. I hired a lawyer last year and I thought everything was taken care of. I do not have a document saying it was taken care of but I have enough documents to prove I really hired a lawyer and I did not get the money.
I do not know anything about the other SBA loan. I did not get any SBA loans.

5. I don't have enough documents for borrowing money.
-> the most of my debts are from small finance firms or individuals. I had really high interest rates minimum of 30% to maximum of 120%. They never made a documents or they never gave me any receipts for paying interests. What am I supposed to do?

6. Wasn't able to explain the loss of asset.
-> I already explained this on the creditors meeting. I have no idea why they are saying this. I had a creditors demanding money for more than a year. It went to a point where they come to my business and won't leave until I pay them something. So I tried really hard to sell the business. But because everybody knew(very small community) my situation, they did not want to pay much for my business. The price went from $800k to $500k which is not enought to pay off all my debts. Even if I sell the business, I will have to file a bankruptcy anyway. Then, I had a problem with Alcoholic Beverage Controls, and I had to close my business.


I wanted to talk to my lawyer right now but he isn't picking up the phone for last 5 hours. Does my case look bad? Also, my lawyer said I need to pay him hourly now since it's a litigation case. Is it what I am supposed to do? or should I look for a different lawyer now?

Sorry for the bad English. It's my 3rd language.
Please help me. Thank you in advance.!

[HHM]

1. You have to list all creditors regardless of their dischargeability status...your mistake, valid objection by trustee

2. How did the trustee even find out?

3. Again, you must list all debts...your mistake, valid objection by the trustee.

4. Ok, but somewhere, someone is saying you have an SBA loan. You will probably need to provide some proof.

5. Not sure about this one. The trustee usually doesn't care about loan documentation.

6. What asset(s) specifically? The trustee is fishing to see is he can unwind any of the payments you made.

I am glad you said you have a lawyer as you have many issues. Did you tell your lawyer you had IRS debt and he told you not to list it, or did you keep it from him. If the prior, you need to come clean with your lawyer and tell him what is going on. Generally, speaking, must objections can be worked out.

[southernbelle]

I agree with HHM. I filed in April due to a failed business and divorce. I listed EVERYTHING. I too have non-dischargeable taxes and one employee that is owed from bad checks given to her by my ex-husband (about $200), but I came completely clean with my atty. and told him everything up front. I couldn't afford to have the Trustee find something out the hard way because this BK means so much to me. I even have pictures of the equipment I had to put in storage and have stored at my home. There are a couple of items in my equipment inventory that I would like to keep, but if I can get through the discharge problem free, they can have them.

Basically, in your case you might have to supply additional paperwork to undo the damage that was done by not disclosing it originally in your paperwork when you filed. Hopefully the Trustee will understand your position and will allow you to explain your side of the story. I will pray your case ends well.

[Prideofjc]

1. You have to list all creditors regardless of their dischargeability status...your mistake, valid objection by trustee
-> I accept my mistake for this one
2. How did the trustee even find out?
-> Bunch of creditors gathered and tried very hard not to get me a discharge. They first tried to prove I hid some cash but they couldn't because I didn't hide any. So this was all they could come up with.
3. Again, you must list all debts...your mistake, valid objection by the trustee.
-> This isn't my fault. I don't owe that person any money. Everything was taken care of. I don't know what proof trustee have to say this.
4. Ok, but somewhere, someone is saying you have an SBA loan. You will probably need to provide some proof.
-> This thing is kinda taken care of. This loan officer got 2 loans of my name from PNC bank and ran away. I thought it was only 1 loan but it was 2.
5. Not sure about this one. The trustee usually doesn't care about loan documentation.
-> They never required additional documents or gave me time to amend anything, either.
6. What asset(s) specifically? The trustee is fishing to see is he can unwind any of the payments you made.
-> The objection paper doesn't say ANYTHING in specific. It just says I failed to explain loss of asset.

I am glad you said you have a lawyer as you have many issues. Did you tell your lawyer you had IRS debt and he told you not to list it, or did you keep it from him. If the prior, you need to come clean with your lawyer and tell him what is going on. Generally, speaking, must objections can be worked out.
-> Well, there was misunderstanding between me and my lawyer. I really think I told my lawyer I had debts to employees and IRS but I thought he said not to list it. Of course he denys it saying it never heard about employees and taxes from us :P. I don't wanna blame him anymore, because I need to take care of this thing, first.

Thanks for replying. I just talked to my lawyer. My lawyer said pretty much nothing in these objections are 'bad faith' and all can be explained. He also said there is a good chance we will win if we go to the trial.

Oh well, I guess all I could do is pray. T_T

[Prideofjc]

I agree with HHM. I filed in April due to a failed business and divorce. I listed EVERYTHING. I too have non-dischargeable taxes and one employee that is owed from bad checks given to her by my ex-husband (about $200), but I came completely clean with my atty. and told him everything up front. I couldn't afford to have the Trustee find something out the hard way because this BK means so much to me. I even have pictures of the equipment I had to put in storage and have stored at my home. There are a couple of items in my equipment inventory that I would like to keep, but if I can get through the discharge problem free, they can have them.

Basically, in your case you might have to supply additional paperwork to undo the damage that was done by not disclosing it originally in your paperwork when you filed. Hopefully the Trustee will understand your position and will allow you to explain your side of the story. I will pray your case ends well.

thank you very much

[JRScott]

First thing is to get an appointment with the lawyer ASAP. Take whatever you have especially in relation to the items you admit to the lawyer. Then you need to try and find the documentation where you paid the SBA, someone has reported it. Might do good to pull a statement from all the credit bureaus again, make sure no one stole your identity to get the other SBA.

Also since English is your third language, your creditors were seeking a dismissal, not a discharge. If you discharge that is good for you, if you get dismissed that is bad for you in BK Court.

On point 6 your lawyer needs to find out what asset was lost. If english is your third language there could have been some misunderstandings of what you said at the 341 as well as your lawyer. You most likely will have to pay the lawyer more money and he's going to have to amend a lot of the paperwork it sounds like.

Good Luck.