Some ???s re trustee meeting & CC charges from years ago?

[welovedis]

Hi-
First post here, my husband and I filed a chapter 7 w/our attorney on 11/18, our meeting of creditors is tomorrow (12/11/08). Last week I received a letter from the attorney that the US Bankruptcy Court was looking for further information from us including: bank statements going back to the beginning of 2007, credit card statements for the last 3 years on specific accounts, and detailed information about our monthly expenses for home maintenance.

I can understand the one about home maintenance because we anticipate a large expense for septic tank replacement and our attorney told us to average that into out home maintenance expenses. They have been high for the past year & 1/2 since we bought our house and will continue to be.

I don't understand the CC statements and bank statements going back that far, is that normal?

Today the attorney called me just to remind me (like I needed reminded) of the meeting tomorrow and said that the Bankruptcy Trustee may ask us some questions and that there would also be a representative from the US Trustee's office there because they had questions about some charges on our CCs from awhile ago. I'm talking mid-2006---we did take a short trip to Disney world but most was paid by family, although we did pay for some it.

Another CC is a huge one--$44K balance that we opened last Sept. We needed the money after we bought our house and found a number of unexpected repairs. We thought we were going to be ok paying it off with my husband's OT at work but that has dried up, hence the need to file.

They also asked about a trip to NYC this past Labor Day weekend with my sister-in-law who is really ill, sort of a last trip together kind of thing but we didn't charge it, we paid for it from our checking account and didn't spend a lot of money at all, my father in law paid for most of it.

He also said they want to go over some specific deposits (some he said were around $20-40) into our checking account over the past 6 months. I mean, is that something they normally do?

I'm just getting all nervous and my husband and I are a little worried about this latest call we got.

Are these types of things fairly normal? We are in NY if that makes a difference, Western District Bankruptcy Court.

Thanks in advance, really informative site!

[TEW]

sounds like an audit or maybe they are looking at chapter 13 for you. how many little deposits of 20 or 40 that can add up. was that included as income

[welovedis]

Thanks for the quick reply.

What would an audit mean? We are certainly not trying to hide anything and have handed over everything requested ASAP.

I mean like if you buy something and get a rebate of $20 and deposit it in the bank, I can't account for it like income with a paystub--that kind of thing. Attorney said something about 3-4 deposits over the past 18 months that didn't match up with paystubs. There is one that is about $400 from over 6 months ago, that is from a warranty company that paid me when something broke in our house and it was warrantied for a year after closing. But nothing that we trying to hide or any other weird income or anything.

Maybe we are just getting nervous because tomorrow is the day we go to the meeting and we are still embarrassed and upset that we are in this position to begin with.

Also, the trip in Sept, just to be clear, we wouldn't have gone on if we had known that DH would lose his OT and we'd be up the creek. We just went along thinking we'd be ok and now we aren't so I wonder if that is sending up a red flag or something.

[B65]

I am so sorry

that sounds just awful.... I don't understand how they can be interested in things you did 3 years ago..... what is the relevance in that? also how did they know about your trip, was it large things from the checking account? and the $20 deposits blow my mind that is such a small thing..... All I can say is, just provide what you can and be honest and you will be ok... Good luck and please post after your meeting?
are you a lot over the meidan and is the debt very high?

B

[banca rotta]

Another CC is a huge one--$44K balance that we opened last Sept. We needed the money after we bought our house and found a number of unexpected repairs. We thought we were going to be ok paying it off with my husband's OT at work but that has dried up, hence the need to file.

Thanks in advance, really informative site!

Was this "last September" 2008 or 2007. I will assume 2007. I sure hope it was not 2008.

[welovedis]

B65-our CC debt is 88K, our mortgage is 140K and a car loan for 10K but we are keeping both of those, the 88K is what we are looking at trying to wipe from the slate.

I'm not sure what you meant about the median, but we had to do the means test since his income recently dropped. It showed our annual income to be 73365 and the median income to be 65477 but this figure (the 73K) included his OT wages. When it came down to it, the Determination of Presumption, we had less than $100 of disposable income.

[welovedis]

Was this "last September" 2008 or 2007. I will assume 2007. I sure hope it was not 2008.

Sorry, it was September 2007.

[StartingOver08]

Well OP, I had to provide 3 years worth of all my cc stmts and the same with bank statments. Also the US Trustee was at my 341 (by phone) along with the panel trustee.

My 341 was continued as they needed more time to review all the documentation they asked for!

However, having said all that - they declared me a no asset Ch 7. So, even if they look extra hard at you, when you have the documentation there is no need to worry.

[welovedis]

that sounds just awful.... I don't understand how they can be interested in things you did 3 years ago..... what is the relevance in that? also how did they know about your trip, was it large things from the checking account? and the $20 deposits blow my mind that is such a small thing..... All I can say is, just provide what you can and be honest and you will be ok... Good luck and please post after your meeting?
are you a lot over the meidan and is the debt very high?

B

Also, they know about the Disney trip because the charges to the CC in 2006 clearly show Disney world resort. I certainly wouldn't try to hide it from them, back in 2006 we had no idea what was going to happen today.

The NYC trip, there was a charge to a NJ hotel (we stayed in NJ) and one charge from a store there (my son saved his allowance and bought a game from Nintendo World). Since he's autistic we don't give him the cash but keep a running tally and he can buy things when he's accumulated enough. Both things were paid for with my debit card attached to my checking account. So that is how they know about the trip there.

i certainly won't deny anything and we will be upfront and truthful in their questions, I'm just surprised to get asked these things and wonder if this happens to others.

What is an audit, it is like an IRS audit or something?

[welovedis]

Well OP, I had to provide 3 years worth of all my cc stmts and the same with bank statments. Also the US Trustee was at my 341 (by phone) along with the panel trustee.

My 341 was continued as they needed more time to review all the documentation they asked for!

However, having said all that - they declared me a no asset Ch 7. So, even if they look extra hard at you, when you have the documentation there is no need to worry.

Thanks, I feel like I can take a breath now. I do have documents to back up everything. Maybe not a $20 rebate check, but I saved the check stub from the homeowner's warranty stuff and do all my banking with Quicken so I can (hopefully) go back and tell them what any little thing might be from.

So perhaps they will continue ours as well since they are going to ask more questions tomorrow.

Also, DH is wondering, do we wait to file our 2008 tax return? I would assume we would until things are over with? I think we would be close and either get back a little or owe a little. Any advice?

[StartingOver08]

You will have a much better idea when you finish the 341 tomorrow.
It is probably a good idea to file 2008 as soon as practical in jan or so - but before it is due.
Even if you owe a little on the taxes it is very, very easy to make arrangements with the IRS - especially when you are in BK. They just assume (rightly!) that you are insolvent and they make the payments extremely small. (Ch 7)
If it is a CH 13 I am sure the payments can be included, but I only know about CH 7 and not 13's.

[B65]

wow

I feel it must be an audit as you debt does not seem too high and you are not too far over your median.... Good luck i think you will feel better soon when your 341 is over.

B

[welovedis]

Thanks

I did a search thru my Quicken files and found I had more deposits that I realized that weren't for paychecks. Things like family gifts (we bought it and everyone sent us a check), garage sale money, overpayment refund from a college course I took, refund from an insurance company when we changed companies, overpayment from mortgage escrow. I had no idea there were so many.

I am thinking of going back 1 year and making up a word doc to take with us showing the deposit explanations. If they want more paperwork to back things us I will have to find it and produce it but at least I can take this along I guess.

[danaf]

Sounds like an audit to me too. It happens randomly. But - the 44k is alot to take out a yr before filing so as long as you can show exactly where that money went then you should be fine. Bring receipts!

[Help!]

I didn't see any newer posts about how your 341 hearing went. If it went well (and I hope it did!) congrats. If it did not, you might want to read about what happened in our case beginning with the first few posts in which we were asked for similar documentation. It evolved into a very complicated Ch. 7 case, but it had a happy ending. Good luck!