How long does UST have?

[Kingxray]

As I stated in other posts we have refiled our C7 after dismissing the first one because my dad's lawyer got the UST involved and caused us a bunch of grief. We had our 341 on Aug. 13 and sure enough my dad's lawyer was there again with a bunch of useless questions. The panel trustee continued the 341 until Sept. 2 for amendments to the means test and sch. J. So far no UST has been assigned to our case nor have they gotten involved.

My lawyer mentioned to me that the UST has only so much time. I should have asked what that meant. Does anyone know if the UST has a time limit on when they can get involved and file motions/objections and if so what is that time limit? Thanks as always.

[justbroke]

Well, your lawyer is correct, in that the United States Trustee (UST) has only so much time, but he didn't elaborate.

If the UST is going to dismiss for "abuse", s/he must file a Statement with the Court that there exists a "presumption of abuse", within 10 days of your concluded 341 Meeting. The UST may not file a "unable to determine" notice. The UST must eitehr file a "presumption of abuse" or not within 10 days of the concluded 341 Meeting. If the UST does file a presumption statement, s/he has 30 days to actually file a Motion to Dismiss or Convert. This is another deadline that they must meat, otherwise you're okay.

Then, there's the ubiquitous and seldom used dismissal for "bad fiath" and/or "totality of circumstances". The UST can use that section of the Code (11 USC 707(b)(3)) up until discharge. However, the bar for claiming bad faith is fairly high and USTs usually don't dismiss for that unless you outright lied, were deceptive, or constructively hindered the UST in administering your case, or for outright fraud.

The second bar "totality of circumstances" is used when the UST believes you can actually fund a Chapter 13, regardless of what the Means Test is saying. For example, you may be surrendering that McMansion in the Bankruptcy. Courts have consistently shown that the amount "due" ont he mortgage can be claimed on the Means Test. This has frustrated USTs who don't think you should be able to, but Congress' intent is pretty clear on that subject. So, the UST knows, and the Debtor knows, that since they are surrendering the McMansion, they have thousands per month of disposable income. Therefore the UST would file a 707(b)(3) motion to dismiss on totality of circumstances. The UST cannot file a 707(b)(1) motion for abuse because Congress allows it on the Means Test.

In the end, the most common hurdle is presumption of abuse.

Even though I went through all the machinations of how a UST can get your case dismiss or converted, the ubiquitous reason for dismissal is for abuse. The others "bad faith" and "totality of circumstances" are reserved for special cases.

For 99% of the debtors, getting past the 10-days after the concluded 341 Meeting of Creditors, is what you are looking for.

[2manybills]

JB: Out of curiosity, I have seen many people on her post that the 10 days is "court or business" days. Section 704 just says "10 days". As long as I have been in the legal field, when the code says 10 days, it is 10 "calendar" days not "court" days.

[justbroke]

JB: Out of curiosity, I have seen many people on her post that the 10 days is "court or business" days. Section 704 just says "10 days". As long as I have been in the legal field, when the code says 10 days, it is 10 "calendar" days not "court" days.

It is absolutely positively calendar days. (See Federal Rules of Bankruptcy Procedure Rule 9006)

The only exception is if the "end" date falls on a Saturday, Sunday, Holiday or a date the Court is not in session (due to, for example, inclement weather).

Now, FRBP 9006 does get confusing. It states that if the due date is less than 8 days, then it is, in fact, business or Court days.

[Kingxray]

Ok thanks. So does that mean since our 341 was continued until Sept. 2 that the UST will have 10 days after that date (Sept. 2)? Pacer says our 341 on Aug. 13 was terminated and that we have a 341 scheduled on Sept. 2.
Thanks again for the info.

[2manybills]

Thanks. That's what I thought but I keep seeing all these posts about "court" days.

All of the courts do the Saturdays, Sundays and Holidays deal. Years ago in California, when you counted backwards, in other words if something was due let's say 50 days before the hearing, then it would always be on Friday. Whereas if something was due 50 days after service or whatever the case, then it went to Monday. Not anymore, the Code of Civil Procedure in California is very specific that everything goes to the following court day when it falls on a Saturday, Sunday or Holiday.

And now because our great State is broke, all of the Courts in California are closing on the 3rd Wednesday of every month. The employees get no pay and there is now great dispute over whether that is considered a holiday or not.

[justbroke]

Ok thanks. So does that mean since our 341 was continued until Sept. 2 that the UST will have 10 days after that date (Sept. 2)? Pacer says our 341 on Aug. 13 was terminated and that we have a 341 scheduled on Sept. 2.

Yes, it's counted from the "concluded" 341 Meeting. The operative word is "concluded". Unless and until the Trustee concludes your 341 Meeting, which you'll know at the end of the 341 Meeting, the clock hasn't started.

So, if your 341 Meeting is actually concluded on September 2, the Trustee will have until September 14th to make his/her statement, if any, on presumption of abuse.

[justbroke]

All of the courts do the Saturdays, Sundays and Holidays deal. Years ago in California, when you counted backwards, in other words if something was due let's say 50 days before the hearing, then it would always be on Friday. Whereas if something was due 50 days after service or whatever the case, then it went to Monday. Not anymore, the Code of Civil Procedure in California is very specific that everything goes to the following court day when it falls on a Saturday, Sunday or Holiday.

I'm such a law geek now. If you read the Committee Notes on FBRP 9006, you'll see where the reasoning came from with the Court versus Calendar days and why the cutoff for Court Days is at 7 days.

And now because our great State is broke, all of the Courts in California are closing on the 3rd Wednesday of every month. The employees get no pay and there is now great dispute over whether that is considered a holiday or not.

I could see both arguments, but even the Federal Rules of Civil Procedure Rule 6, from which RRBP RUle 9006 comes from, used the word "legal holiday". However, in the Rule, they state that

As used in this rule and in Rule 5001(c), "legal holiday" includes New Year's Day, Birthday of Martin Luther King, Jr., Washington's Birthday, Memorial Day, Independence Day, Labor Day, Columbus Day, Veterans Day, Thanksgiving Day, Christmas Day, and any other day appointed as a holiday by the President or the Congress of the United States, or by the state in which the court is held.

Notice the bold underlined section. A State holiday can be considered. So if it's a State imposed Court holiday....

That should be fun stuff to watch in California.

[2manybills]

It's been great fun, especially since the Clerks are generally not happy about a pay cut so they're not cooperating with information too much.

The courts in Riverside County are already so backed up because the criminal calendar always takes precedence, I have no clue when these civil cases will ever get to trial. Oh well, makes it fun!

Actually, the USDC and Bankruptcy Court's have made life much easier with Pacer filings, etc.

[Brokeaswell]

I would add to this that the US Trustee can file a Motion for Extension beyond the 30 days after flagging a bankruptcy for Presumed Abuse. In my case they have asked for a additional 60 days w/o filing for a dismissal or Motion to Convert. Only reason is that more time is needed.

If you have read law where they are not allowed to do this please direct me to it please. I have seen cases with this Trustee last more than a year.

[justbroke]

If you have read law where they are not allowed to do this please direct me to it please. I have seen cases with this Trustee last more than a year.

I don't think they can extend it...

The key is in 11 USC 704(b) which determines what the Trustee is to do and how they do it. In 704(b)(2) it reads... "The United States trustee (or bankruptcy administrator, if any) shall, not later than 30 days after the date of filing a statement under paragraph (1), either file a motion to dismiss or convert under section 707(b) or file a statement setting forth the reasons the United States trustee (or the bankruptcy administrator, if any) does not consider such a motion to be appropriate". Nowhere does it add the words "for cause, may ask for an extension" as is allowed in other places. Remember, statutory construction states that you can't just make up things, you have to take the plain language.

Since there's no language allowing the Trustee to file an extension... this should be shot down based on the clear and unambiguous language in 11 USC 704(b).

In re: Snyder, Western Division of Arkansas Case No. 3:07-bk-73382

I think this case is on point, although it covers the 10-day noticing period. Like the 10-day noticing period, that authority comes from 11 USC 704(b) which does not have any means for the Trustee to ask for an extension for cause.

I think they can ask for an extension of the discharge date under Rule 4004, but not for the 707(b)(1) dismissals for presumption of abuse.

But, that's just my opinion.

[Brokeaswell]

justbroke, I agree with you and thank you for all your good advise. I have shared this case law with my attorney to look into this. I believe this has been going on in our District and no one has challenged it. This is the update on my case:

Filed on day 10 - The United States Trustee has reviewed all materials filed by the debtor and has determined that the debtor's case is presumed to be an abuse under 11 U.S.C. Section 707(b).
(no Motion to Dismiss or Motion to Convert was filed) only presumption of abuse

Stipulation between the United States Trustee and the Debtors filed to extend beyond the 60 days to August 28th which was 13 days past by 60 day date. Attorney had agreed to this.

Motion to Extend Time to File a Motion to Dismiss Pursuant to Section 707(b) filed on 8/14 asking for extension till 10/15
Only reason give was: The United States Trustee needs additional time to conduct a thorough investigation into the
financial condition, expenses, income, and assets of the debtors.

I am hoping my attorney reviews this case law and helps me get my case discharged once and for all.

[whipster1]

You can ask for a hearing before the Judge. Let the UST explain why he is moving so slow and delaying your Fresh Start.

[justbroke]

Filed on day 10 - The United States Trustee has reviewed a Motion to Extend Time to File a Motion to Dismiss Pursuant to Section 707(b) filed on 8/14 asking for extension till 10/15
Only reason give was: The United States Trustee needs additional time to conduct a thorough investigation into the
financial condition, expenses, income, and assets of the debtors.

I am hoping my attorney reviews this case law and helps me get my case discharged once and for all.

What you just wrote is EXACTLY on point with the Case I mention above. The U.S. Trustee doesn't have any power to extend the time to file a motion to dismiss under 707(b)(1) because it's not specifically granted. The Rule (4004) doesn't extend this either.

It would be great if your lawyer was up to the challenge and actually challenged this! In the case above, the Judge did this suo sponte because it was actually a stipulation between the Trustee and Debtor. The Judge basically said "hold your horses... I smell horse... stuff".

[Brokeaswell]

That is the question. Will my attorney challenge this. I'm not sure. After they receive their money, why should they unless he charges me more. I have Chrysler's case hearing coming up on the same day. They want to repo our vehicle even though we are current because they claim we did not send back the reaffirmation but we did. I was thinking last night that there really should be a place as filers in which we can claim that the system is abusing us! I know what would happen if I showed up for the hearing and my attorney doesn't. I tried to fire my Chapter 13 attorney and ended up ProSe in front of the Federal Judge. It wasn't pretty. He was not at all happy to see us approach his bench w/o our attorney.