Trustee asking for information after discharge

[bkc]

First of all, thank you to everyone for this forum. This is my first time posting, but countless questions have been answered through hours of reading this forum.

We have had a somewhat complicated Chapter 7 case. I was self employed, being paid with a 1099. Shortly before filing, my main employer switched me to a w2. By filing with the 1099 income, we were able to use business expenses to get below the medium income and avoid the means test issues. Everything went smoothly, the UST asked for some extra information prior to our 341, and we hadn't heard much from them. Our 341 was easy, and shortly after our local trustee marked it as a no asset case. We checked pacer religiously and saw our discharge about 62 days following the 341. Everything seemed great until we got a call from our attorney saying the UST wanted to see our pay stubs since the day we filed and also wanted to know when I switched from a 1099 to a W2. We are delivering all of that to our attorney on Monday, but we are a bit nervous. Is there anything the UST can do after discharge? We even received our discharge letter in the mail today. Anyone ever seen something like this?

[canusaybroke]

Hey BKC...I dont know the answer to this, but what has come of it since?

[justbroke]

Is there anything the UST can do after discharge? We even received our discharge letter in the mail today. Anyone ever seen something like this?

Yes, the UST can ask for it to be vacated up to a year past close. From what you posted, I'm assuming that the UST is trying to determine if the "totality of circumstances" allows you to receive a discharge.

However, if you received your discharge, I don't see how the Trustee can really go back and have it vacated unless it was fraud or fraudulently obtained. I don't think your discharge was fraudulent.

You see, the Trustee can ask for a dismissal based on a "totality of circumstances" under 11 UC 707(b)(3)... the section of code that allows him to do so. However, this must be brought up before discharge! The only way to vacate a discharge is for actual fraud, which must be proven.

I think the UST is a day late... and a dollar short. ;)

[bkc]

So far we haven't heard anything, we check pacer on a daily basis. Our attorney says the UST is probably just padding his files, and everything should be fine. Meanwhile, we have started repaying on our student loans, setup a payment plan with the IRS, and are about to surrender a car. So we are acting as if it was discharged, hopefully that continues to be the case.

[aces67]

Good Luck to you! I hope it all turns out just fine.

[music12]

i am not sure why your attorney would even respond to the trustee at this point. the only way for the trustee to reopen the case is to have some kind of evidence of fraud. he doesn't have it. so why let him go on a fishing expedition looking for something, when the case has already been closed? you have your fresh start and nobody is supposed to mess with that, i thought.

[justbroke]

i am not sure why your attorney would even respond to the trustee at this point. the only way for the trustee to reopen the case is to have some kind of evidence of fraud. he doesn't have it. so why let him go on a fishing expedition looking for something, when the case has already been closed? you have your fresh start and nobody is supposed to mess with that, i thought.

While it's easy to say just ignore the Trustee, these Attorneys work with the Court and the Trustees everyday. They do not want to sour their relationship. I'm sure it's probably just some due diligence on the Trustee's part. If the information is readily available, fine... provide it to the Trustee. If it's not, then you can ask them why and pushback a little.

The U.S. Trustee still has awesome powers even after your case closes, so it's usually a good idea to cooperate. If you think they are wrong, there are ways to deal with that through the Court.

I'm just thinking it's not so simple as just not responding. You should see the creditor attorneys, debtor attorneys, U.S. Trustee and the courtroom clerk all laughing hanging out, joking around and downright casual before the Judge walks in. While they are all there representing their "client" or the Government, they understand that there needs to be some civility and it's (usually) not so adversarial in Bankruptcy Court.

[music12]

i just think it's scary that even though it is probably in the best interest of the client just to say no to the trustee at this point, the lawyer would care more about their future relationship with their friend the trustee.

[justbroke]

i just think it's scary that even though it is probably in the best interest of the client just to say no to the trustee at this point, the lawyer would care more about their future relationship with their friend the trustee.

I hear ya.

But, at the same time, I would love to have an attorney who is on good terms with the Trustee and the Court anyday. The legal system is very interesting in the way that most things are done through settlement and negotiation before ever getting in front of the Judge. In fact, most make you attempt to come to some agreement before "bothering" the Judge.

I was at my confirmation hearing, and so was my lender's attorney on an objection. When we all got to the podium, the Judge asked if there were open issues and we did have some. She said to go get a conference room, work them out, then come back with an agreement or other stipulations. We so did. Not adversarial, cordial... sitting side-by-side at a conference table... elbow to elbow... going through the numbers.

Sure, I could have stormed out and said I'm not working with them. But what does that do? And it's true, that they play on opposite teams, but at the end of the day, they are all professionals. They implicitly trust each other unless and until they can't. I learned that too by filing pro se.

I think that's worth something.

[bkc]

Thanks justbroke. I am sure everything will be fine, it just isn't fun looking forward to your discharge only to have something else come up. And I understand the concerns with my attorney, but the trustee asked for the information before our discharge was in pacer. There was actually a voicemail from my attorney one night, and the discharge was in pacer the next day. The theory is that the trustee didn't file the necessary paperwork to prevent the automatic discharge. When I spoke with my attorney, he opted to not call the trustee right away. He didn't want to point out the discharge to them.

So, long story short, we are moving forward assuming we are discharged and hoping it stays that way.

[justbroke]

When I spoke with my attorney, he opted to not call the trustee right away. He didn't want to point out the discharge to them.

See, told you that your lawyer was a "smooth" operator.

[music12]

See, told you that your lawyer was a "smooth" operator.

yes, very smooth! good to know your lawyer is actually doing the right thing; the longer the trustee is unaware of the discharge, the later on will the trustee realize they need to reopen (if they want to), and the less likely it will be allowed. right?