How does an asset case work?

[Vanda]

Now that my Chapter 7 has been declared an asset case what happens next? My assets (tax refund mostly)are around $2000. Who gets the money, it's not very much for them all to split. How does it happen? Now they have an additional 90 days.

[lrprn]

Now that my Chapter 7 has been declared an asset case what happens next? My assets (tax refund mostly)are around $2000. Who gets the money, it's not very much for them all to split. How does it happen? Now they have an additional 90 days.

Your trustee will liquidate any asset you couldn't protect when you filed that the trustee thinks is worth liquidating (in your case, your tax return is easy - it's already cash). Then your creditors that file claims within the 90 days will each get an equal portion of the asset money.

Keep in mind that asset cases typically discharge on time but often don't close on time. See HHM's excellent explanation about why that doesn't really matter to you here - http://www.bkforum.com/showthread.php?p=72253#poststop

[james113]

what if you have alot of assetts like dvds, cds, old computer monitors, chairs, etc, how likely are trustees to sell these? and how do they sell them, by having a garage sale?

[JoeBankrupt33]

Don't count on the trustee doing a garage sale. It's not worth his time to sell a bunch of junk. Also, here in CO, I'm pretty sure that the trustee won't bother even looking to sell your non-exempt stuff unless it is worth more than $2000.

Also, you must fairly value these assets. Do you have 2000 old computer monitors? Then you don't have $2000 worth.

[momof3b1g]

Now that my Chapter 7 has been declared an asset case what happens next? My assets (tax refund mostly)are around $2000. Who gets the money, it's not very much for them all to split. How does it happen? Now they have an additional 90 days.

When did you find out it was an asset case?

[Vanda]

I saw on PACER that it was an asset case and that they were giving creditors 90 days more to file a claim.

[Vanda]

Can trustee still object to a discharge?

If they have declared me an asset case and extended the time to file proof of claims, could the trustee still object to a discharge during that time? First they asked for a 30 day extension of time to file a 727 objection, but when I read the actualy document it was just because they hadn't received everything they asked for but I did get it all to then. and then 2 weeks later I saw they had declared it an asset case and done the 90 day extension. So are they still thinking about it, or are they just going to distribute my tax refund and the money I have to pay them for the ill fated jewelry I bought last August? My mortgage is a little behind but if I catch it up should I be okay and eventually get a Chapter 7 discharge?

[Vanda]

Chapter 7 Asset Case

Still waiting and wondering about this, how it works. I haven't seen answers to this on the Board. As I understand it, at some point, the trustee's office will tell me how much they think I have in the way of assets. Then, I pay them this cash and they distribute it among my creditors, making sure to pay themselves first, I would assume. So, now it's just a waiting game, correct? My attorney thinks they will file for another extension (the current one runs out on May 14). How long can they stretch this out? What document will they file to start the settlement process? Thanks in advance for any input!

[Bankruptcy20]

I think you are not getting a lot of responses, because the post that "lprn" copied above pretty much answers the questions. Besides, almost all cases are non-asset, and most of the posters here are in a no-asset scenario themselves.

I am not an expert on these matters, but it seems generally an asset case delays the time between discharge (what you care about) and closing. In an asset case, there is an extended time for creditors to put forth their claims to the trustee (who is working to divy up the pot of gold for the creditors, but it's between the trustee and creditors, and not really you). The extension you mention I assume is an extension for creditor claims, not objections to your discharge, right? Check with your lawyer, that's a key point.

You are effectively out of the scene after you fulfill your honest obligations to the BK process (i.e., 341 and requests for follow-up info).

So, the things to ask yourself and your lawyer:

1) when was the discharge date?
2) what are the assets that the trustee is looking to liquidate Your tax return only? You mention some ill-timed jewelry purchase? Was this an issue with your trustee? Did you get grilled on them at the 341? Did you try to hide these assets, and that opened a Pandora's box with your trustee? And so forth

From what I gather, there's not much reason why one should be an asset case with careful pre-planning. But, tax refund is one scenario (again, in HHM's post above). Or, if you piss off your trustee and it's clear you are hiding assets, etc. And the witch hunt could start, I would imagine. This is one thing I wonder about... it does seem unfair that those people with unavoidable non-exempt assets would probably get more scrutiny and focus from trustees as the trustee is more likely to get paid from the distribution.

Will the trustee call it "easy money" and not hassle you further? Or, will he use it to justify needless scrutiny? Who knows.

[Vanda]

I think you are not getting a lot of responses, because the post that "lprn" copied above pretty much answers the questions. Besides, almost all cases are non-asset, and most of the posters here are in a no-asset scenario themselves.
I am not an expert on these matters, but it seems generally an asset case delays the time between discharge (what you care about) and closing. In an asset case, there is an extended time for creditors to put forth their claims to the trustee (who is working to divy up the pot of gold for the creditors, but it's between the trustee and creditors, and not really you). The extension you mention I assume is an extension for creditor claims, not objections to your discharge, right? Check with your lawyer, that's a key point.

You are effectively out of the scene after you fulfill your honest obligations to the BK process (i.e., 341 and requests for follow-up info).

So, the things to ask yourself and your lawyer:

1) when was the discharge date?
2) what are the assets that the trustee is looking to liquidate Your tax return only? You mention some ill-timed jewelry purchase? Was this an issue with your trustee? Did you get grilled on them at the 341? Did you try to hide these assets, and that opened a Pandora's box with your trustee? And so forth

From what I gather, there's not much reason why one should be an asset case with careful pre-planning. But, tax refund is one scenario (again, in HHM's post above). Or, if you piss off your trustee and it's clear you are hiding assets, etc. And the witch hunt could start, I would imagine. This is one thing I wonder about... it does seem unfair that those people with unavoidable non-exempt assets would probably get more scrutiny and focus from trustees as the trustee is more likely to get paid from the distribution.

Will the trustee call it "easy money" and not hassle you further? Or, will he use it to justify needless scrutiny? Who knows.

Thanks, yes, that post was helpful and I do see that most Chapter 7 filers are non asset (makes sense!) I thought I was too.
I bought the jewelry 5 months before filing, didn't really think about it since I gave it as a gift, and did not list it as an asset since I don't have it. They saw the purchase on my credit card statement. If I had read this forum I would have done many things differently but that is hindsight. Anyway, maybe seeing that I made that purchase did get me scrutinized, I don't know. Nothing was mentioned at the 341 but 3 weeks later they started a flurry of requests, with which I complied as soon as I could, but part of the problem was that the paralegal just sent me an email - I was never sent anything by snail mail - and the email went into my spam. Then, she called me after the deadline asking me where the documents where and I freaked out, I thought I was on my way to a discharge. So it looked like I was not cooperating and they probably didn't believe the spam thing. I think that really caused them to look at my case harder. There are 2 extensions, one is for creditors to file claims and the other is for 727 objections. The 727 deadline is up in a couple of days but my laywer thinks they will ask for yet another extension and he thinks it best to agree and just let them get around to putting together their Stipulation when they feel like it.

[Bankruptcy20]

Vanda, I'm glad to hear you have a lawyer.

There's some interesting "lessons to all" here. Not the least of which is to monitor filtered out emails during these nail-biting days!

More so that we can all learn from each other, may I ask:

1) roughly, how large of a jewelry purchase was this? [there are many posters who claim $200k-$3.2mm of secured and unsecured debt, with a lot of activity on their CC ahead of the 90 day window, and I don't recall a trustee zooming into a jewelry purchase 5 months before filing as you are suffering from. Most people get slight comfort in assuming there is not a raid into your home.]

2) I assume you are above state median income but passed on a means test. Was your 341 hearing the standard 5-15 minutes? Or were you grilled for hours?

3) Anything else besides the jewelry and missed email in your case, that we can all learn from? I don't think anyone wants their no-asset turned into an asset case... Some may say that it's not a big deal, but who wants closing delayed...

I've only been reading these forums recently, but outside of jessegirl's 2004 US Trustee issues that she posted here on the forums about, and your potential for 727 objections from an asset-case declaration, I haven't read much outside of a cookie-cutter no-asset process, so excuse my intellectual curiosity.

[Vanda]

Bankruptcy 20, the jewelry was around $600. They also claim I have equity in my car but NADA retail value is almost the same as the payoff amount so I don't see how I am over the $1,000 exemption.

My 341 was about 5 minutes.

Yes I am over median but passed the means test. I now know being over median invites extra scrutiny.

[Bankruptcy20]

Thanks for sharing. Those are not large figures, obviously.

Good luck.

[Whittier]

I hope all worked out for you and come back and post the outcome

[Vanda]

still not closed!

I recently went on Pacer and saw that an interim report which said nothing. No one has contacted me and of course I don't really want to draw attention to myself - keep hoping they'll just go away! I have since moved, had my house foreclosed on and am happier renting and living without credit cards but I have no savings either - so worried they will cancel my discharge since the case never closed!