If the UST finds you "interesting"

[SuzieBK]

If the UST finds you "interesting," what exactly does that mean? You'll just have to provide more information--additional credit card statements, bank statements, receipts?

I'm starting to think that we'll end up in that pool--above the median, but below the means, $120K in unsecured, $275K in secured (all of which we plan to reaffirm), DH has a good income, we have a paid off Audi, bought some furniture and appliances in November/December, etc, etc. Damn, even writing it all down like that, I'd find us "interesting."

So since we are just starting to collect our paperwork, what is the collective wisdom on what we should compile? It concerns me that most of the credit card companies only provide six months worth of statements online, so if you haven't been getting paper statements AND you've already stopped paying them, you're pretty much SOL for getting two years worth of statements. Plus a lot of our cards are younger than two years (robbing Peter to pay Paul with BTs).

Does this sound like we're screwed? I really want to get moving on filing (we're meeting with an atty a week from Thursday), but if it's better for us to wait, we could stretch it out a bit. But then our card statements will be even more out of date. Oh, man, I'm getting myself in a twist here.

And, another question, do they ever come to your house to appraise your stuff? I have a LOT of china, crystal, silver, etc--a lot of it was inherited, the rest was bought at flea markets and antique shows over the course of 15+ years. None of it is worth all that much individually, but it looks like a lot more than it is. I just have this fear of someone coming to our house and going through everything.

Thanks for any and all advice.

[justbroke]

"interesting" just means that the UST will look closer at the documentation you provided, and potentially dig a little deeper into your finances. This could be painless or painful. No one really knows which version of the probing that you'll get.

The most painful thing could be a Rule 2004 Examination. This is where it gets very intense on the quantity and types of paperwork that is requested.

Even after having disclosed the notorious Rule 2004 Examination (ask the Cat's about it), it could be simple. The reason it gets complex is when the Trustee (or other Creditor) doesn't like the provided documentation and still wants to question something.

Having wrote that, nothing says that it won't be a simple probe and not too much documentation required.

You have to realize that the US Trustee (not the Standing Trustee) is first, trying to make money for himself while preserving the rights of the creditors, and second... making sure that you're not abusing the Bankruptcy system buy getting a Chapter 7 discharge when you can fund a Chapter 13 Reorganization Plan.

As far as what they'll ask for? They will be looking at things that are easily discernable -- for them -- to ask you for. Insider payments over the past few years. Preferential payments within the last 90 days. What types of balance transfers you did recently and what did you buy. Did you have a lot of money (cash or liquidity) in accounts that you hid or otherwise transferred to exempt assets (not that those transfers are particularly fraudulent or illegal).

Overall, they are trying to find out why a person who spent so much money, can qualify for Chapter 7. Then, if qualified, they try to see how much money they can get out of you.

I hope this didn't make it seem scary. While it's routine for the US Trustee (UST) to do these things... it is certainly frightful, at times, for the debtor.

Also, they could audit your home, if they felt you were hiding something, or when you list china and silverware (not flatware), that you didn't use the right values. Especially if you end up exempting all these items.

In the end, it's all about how much money the Trustee wil get for creditors... regardless of whether you get to stay in a Chapter 7, or the Trustee pushes you to a Chapter 13.

Don't worry about it now. Talk to a lawyer first. See what things s/he can exempt. See what they say about the particular UST/Trustees in your District. Listen and learn about what the process is. Ask questions!!!

[lalap123]

Just curious...

How much over the median and under the means are you? Did you have trouble finding an atty to represent you and have they told you that it will be 50/50 as far as the trustee actually letting you do a ch. 7? I'm in the same boat and am trying to decide whether or not to wait 6 months until we go back under the median income. Tough decision, b/c I just want this to get underway and then get it over with, but there's just no way we have any extra money for a ch. 13 plan and I don't know what they could even do in our situation. Make us file 13 then automatically discharge us w/out making us pay anything???

[SuzieBK]

Over the median--$25-$30K annually, depending on how my income breaks down (I'm self-employed, so my monthly receivables vary; in the past we were about $60K over the median, but that's why we're going bk). Under the mean--depends on how I'm calculating it; usually somewhere around negative $100. I'm still not 100% sure of how some of the numbers are calculated--I can put in WHAT we spend, but is that always what we'd be ALLOWED to spend?

In terms of the attorney, at the first place I called (which I now realize is a mill), the person answering the phone (NOT an attorney as promised on their site) took some basic info and then said that because of our income and the fact that we have a paid off car, we can't do Ch7. When I then called a local BK office, the attorney himself took the call and after I went through the big picture, he didn't think that it would be a problem. Now again, we haven't gone through the exact numbers with him. We'll know a LOT more at the end of next week.

The one thing I'm hoping is in our favor is that we have very high real estate taxes. So unless they want to make us sell the house (we have barely any equity in it), we have to pay those taxes. I think that's one of the problems with the median income issue--statewide, it looks like we make a LOT; however, if you look at the median income for our city, we're only a few thousand over the median family income. So fingers crossed that'll be a help.

So, long story short, hopefully we'll both make out fine with a 7.