Warning from lawyer

[lala]

[JRScott]

Never heard of this but I suppose its possible. I really doubt with the depressed markets right now this would be worth it to the trustee. They aren't going to recover in 1-2 years, most places will probably take at least a decade if not longer to recover.

[shabam]

Which state are you in?

[lala]

We're in Seattle, Washington.

We will eventually decide if we want to use state or federal expemptions. With federal we have a much smaller homestead expemption, but then we have the wildcard which could help us keep our cars and some company stock my husband has (privately held company). But the Washington state homestead exemption is $125,000. If we go with the state, I would not be as concerned about the trustee trying to sell the house later on. It would have to appreciate quite a bit for it to go beyond that exepmtion.

I guess we need to get a market analysis to help us determine which way to go.

[justbroke]

I don't think this will be a problem in this market. Back in 2005 to early 2007, the market was peaking and everything was upwards looking. While I would probably challenge the Trustee back then, it was probably a good strategy for Trustees before the market crashed in 2007-2008. Remember, Trustees in Chapter 7s make money on finding assets to sell! They make a lot of money doing it, especially on real property that has equity!

This is why I say that Trustees are strange creatures. Each has their own little world they live in, and what they think is right.

[music12]

I don't think this will be a problem in this market. Back in 2005 to early 2007, the market was peaking and everything was upwards looking. While I would probably challenge the Trustee back then, it was probably a good strategy for Trustees before the market crashed in 2007-2008. Remember, Trustees in Chapter 7s make money on finding assets to sell! They make a lot of money doing it, especially on real property that has equity!

This is why I say that Trustees are strange creatures. Each has their own little world they live in, and what they think is right.

can you explain what money the trustee makes and under what circumstances? don't they just get something like $60 per case?

[StartingOver08]

$60 per case and a commission on all of the assets of the BK estate. See this for explanation directly from the NABT (National Association of Bankruptcy Trustees) site.

How are Panel Trustees compensated?

Panel Trustees are paid $60 for each Chapter 7 case they administer. In addition to the standard fee, Panel Trustees are compensated on an incentive commission bases. Panel Trustees are compensated on a commission basis in order to maximize the dollar amount of assets brought into the estate by the Trustee. The commission is determined on the total disbursements made by the Panel Trustee to interested parties of the estate, excluding any payment to the debtor. The commission rate is : 25% on the first $5,000 distributed; 10% on the next $45,000 distributed, 5% on the next $955,000 and 3% for every dollar distributed in excess of $1,000,000. The commissions earned by the Trustee are reviewed by the Court, when requested, to determine if the fees are reasonable. Panel Trustees are usually awarded their full commission compensation since they handle hundreds of cases in which a great deal of work may be done and the only fee earned in $60.

http://www.nabt.com/faq.cfm#Q11

[justbroke]

can you explain what money the trustee makes and under what circumstances? don't they just get something like $60 per case?

StartingOver has listed exactly how they are compensated. This is why the love to find things to sell. They immediately get 25% of the first $5K, so that's like $1,250 right off the top.

So think about it... $60 or $1,250+? You'd want to find things for sure. It's incentive based!

Their commission on $50,000 of equity is $1,250 + $4,500 or $5,750! Not bad for a day's work.

[music12]

seriously! doesn't this lead to corruption in at least some cases?

and even if not, that's a really big commission. isn't it?

[justbroke]

seriously! doesn't this lead to corruption in at least some cases?

You are represented by a lawyer, so you can bring it before the Judge to litigate it. They don't really make gobs of cash... they make more money as an attorney.

and even if not, that's a really big commission. isn't it?

On the first $5K, yes it is! But remember, they have to pay for their staff with those funds too. So too for any lawyer(s) they retain and office staff, comes from the money that they collect.

Here's some leisure reading for you... they apparently don't make as much money as you would think. In most cases, they make $60.

http://www.************************/...ees/#more-2163

[chad9162]

Hi, I'm just wondering if anyone else has had experience with this.

Our lawyer (or soon to be) is warning us that trustees in our district are attempting to sell debtor’s houses long after the bankruptcy is filed, to capitalize on the appreciation that may have occurred since the filing of the case. In other words, even if the equity in the residence is within the state exemption limit, if the value increases over time, the Trustee will claim that s/he can market the house to get the non-exempt equity. She said they are keeping cases open long after the debt is discharged (up to a year or two).

She did say that they were doing that at the height of the market and maybe not so much now. But, it still really worries me as we want to keep the house.

Has anyone had experience with this?

I'm not buying this at all. The trustee goes after your BK estate, which is established the date you file. That's why you have to be accurate with bank account balances. The estate is a "snap shot" of our assets.

After the filing date no other assets are included in the BK estate so how can equity two years from now be applied? What about your right to a speedy trial/process...I believe I read that in the BK code. Two years is not speedy but harassment.

I think you better interview a few other lawyers or this one really wants your business and trying to impress you by telling something you never heard. My attorney clearly stated that the trustee wants asset so that he can get a cut, but wants to do it quickly. Trustee know what they're looking for and if they don't see it they move on.

I just think the whole concept is absurd! You could use the same argument. Let say you have a vehicle and its above your state's vehicle exemption by $3000. Well in two years it would depreciate so therefore the $3000 is moot. You have to have a standard which is the filing date that establishes your BK Estate. Anything after that has no bearing.