The Significance of Closing an Asset Case

[dspii]

[justbroke]

Bottom line, in most asset cases, you legally cannot dispose of any assets listed on your schedules until your case is closed.

Absolutely true! Many people have been in serious trouble for selling assets post-petition and pre-close where the Trustee had not abandoned the asset (or otherwise administered the asset). This is why I tell people to wait for the case to close, unless the Trustee abandons the asset (under 11 USC 554(a)).

However, you aren't without recourse. You could file a Motion to Compel Abandonment if it's really bothering you.

[tdawg]

So, does this mean that even if my case is discharged if they keep it open that the car company cannot repo my car unless they get permission from the court?

[justbroke]

So, does this mean that even if my case is discharged if they keep it open that the car company cannot repo my car unless they get permission from the court?

Yes, that's exactly what it means. The Stay remains in place until the asset is abandoned by the Trustee or the case is closed.

(I thought, myself, that the stay was automatically lifted after discharge. This is true, but only to those things abandoned by the Bankruptcy Estate. So unless the Trustee has published a "No Distribution" Report by discharge, the Stay remains in affect for all assets not Abandoned by the Trustee! Of course, this was a circuit court ruling that I read recently. It may not be caselaw everywhere, but it makes perfect sense to me!)

[dspii]

Justbroke, I did the research on this after reading multiple posts that said "who cares about the closing, its just an admin function". I am an asset case (tax return), I never received anything that abandoned the property....a notice that has to be sent to everyone in your matrix.

Based on everything I read, I thought I needed to research and post the facts and maybe help others understand the significance...it is tax time and the trustee's are looking for easy pickins.

[backtoschool]

I think in an asset case, you are waiting for the trustee's final report. (mine was filed on Feb 7). In the final report the trustee lists all the assets, bills for his/her fee, and assigns a payout schedule to the creditors. From what I can tell, the creditor's have 21 days to object to their payout amount and then the case closes.

[AngelinaCatHub]

Absolutely true! Many people have been in serious trouble for selling assets post-petition and pre-close where the Trustee had not abandoned the asset (or otherwise administered the asset). This is why I tell people to wait for the case to close, unless the Trustee abandons the asset (under 11 USC 554(a)).

However, you aren't without recourse. You could file a Motion to Compel Abandonment if it's really bothering you.

We got a notice of abandonment far before our close. It listed items abandoned as our house and real property (homestead), a junk car, several other hard to sell items I can't remember. It was a whole year later that we closed as we had to pay the overage on the assets we purchased back, and a preferential payment levy. The Trustee and his lawyer were very good to us though under the amount of ignorance we had and the mistakes made that could have had our ears pinned back. 'Hub

[justbroke]

Justbroke, I did the research on this after reading multiple posts that said "who cares about the closing, its just an admin function".

It is an admin function, but general, the Trustee will file the Final Report of No Distribution, which "abandons" the property of the Estate far before the closing. You'll see multiple posts about people getting almost simultaneous 341 Meeting concluded (just passed) and a No Distribution Report.

I am an asset case (tax return), I never received anything that abandoned the property....a notice that has to be sent to everyone in your matrix.

Until you get the Final Report or the Trustee specifically Abandons the property of the Estate... the automatic stay remains in place and the property remains the property of the Estate.

Based on everything I read, I thought I needed to research and post the facts and maybe help others understand the significance...it is tax time and the trustee's are looking for easy pickins.

I read an Attorney's blog the other day and it basically read that it's Hunting Season for Trustees. Specifically... hunting for tax refunds! They love this time of year!

I think in an asset case, you are waiting for the trustee's final report. (mine was filed on Feb 7).

Exactly. However, in a No Asset Case, you're also waiting for the Report of No Distribution and the Trustee excusing themselves and abandoning the property. This was a distinction that I never really noticed, but the caselaw is piling up. Mostly brought up by Stay violations.

[bktmom28]

I believe this is the proper thread for this question...

Our case was discharged on January 12th. However, we are an asset case awaiting closing and the last day to file claims is March 3rd. How soon after that date does the case close? We filed in October 2009. Also, what I was wondering is how does trustee disperse the funds? Does she basically send a notice out to the CC's telling them there is money to claim, or does she send them their portions? I was just curious. Thanks!

[justbroke]

Ask AngelinaCatHub how long it takes! It can take a year or two to close an asset case. The assets must be fully administered by the Trustee. If this involves sale of property, recovery or preferences, or any avoidances... this will take a long time.

The notice to the unsecured creditors (credit card companies) was already sent out when the Trustee determined that it was an asset case and that assets were going to be administered. That's why you have that claim bar date.

[bktmom28]

The only asset we have is our tax refund being sent directly to the TT. It is about $2700 compared to $47000 in CC debt. What if she chooses to not disburse the funds? Does she then change it to a no asset case? Also, we surrendered our home. Does that come into play as an asset? Will we have to wait until that is sold for our case to be closed? Our attorney told us that as far as we are concerned, we are closed pending the tax refund.

[dspii]

The only asset we have is our tax refund being sent directly to the TT. It is about $2700 compared to $47000 in CC debt. What if she chooses to not disburse the funds? Does she then change it to a no asset case? Also, we surrendered our home. Does that come into play as an asset? Will we have to wait until that is sold for our case to be closed? Our attorney told us that as far as we are concerned, we are closed pending the tax refund.

Based on the amount of your refund and your district, the TT may leave your refund alone, but probably not, sounds like a fair trade...at least in my case it is. If the house was foreclosed on, the automatic stay lifted, then the sale of the home will NOT affect your closing, its the banks problem. The TT already sent out a notice to your creditors, once the TT receives your money, they file some stuff, wait a few weeks and your case should close, just like your attorney said.

[tdawg]

Yes, that's exactly what it means. The Stay remains in place until the asset is abandoned by the Trustee or the case is closed.

(I thought, myself, that the stay was automatically lifted after discharge. This is true, but only to those things abandoned by the Bankruptcy Estate. So unless the Trustee has published a "No Distribution" Report by discharge, the Stay remains in affect for all assets not Abandoned by the Trustee! Of course, this was a circuit court ruling that I read recently. It may not be caselaw everywhere, but it makes perfect sense to me!)

Hmmm... I'm thinking in reality this may not be true. The repo man left a card on my doorstep a few days ago. I called today and they asked about making arrangements to pick up my car. I'm going to leave it for them to pick up tomorrow at a location closer to them. My case still says "No Asset" on Pacer - even though the trustee has not abandoned the assets. I definitely want to cooperate with the repo man. I am discharged but not closed.

[justbroke]

Hmmm... I'm thinking in reality this may not be true.

If you are No Asset, and you have received a discharge, the automatic stay is automatically lifted as to your assets. The affect of the case closing on assets, only affects assets in an "Asset Case".

The Stay remains in place until the asset is abandoned by the Trustee or the case is closed.

So, let's parse this out. In a "No Asset Case" the Trustee files a Report of No Distribution and "abandons" all assets of the case. So, at discharge, the Trustee has effectively abandoned all property and the automatic stay is lifted.

If the Trustee filed a "notice of assets" and potential distribution, this makes it an "Asset Case". All property remains property of the estate and the automatic stay is in full effect until the earlier of, by Motion of Abandonment by the Trustee and approved by the Court, a dismissal, or the case closes.

[lulabelle]

We have a vehicle that we were intending to reaffirm. We will also very likely be an asset case. If we decided not to reaffirm the vehicle, does that mean that they could not repo it until our asset case closed? Or would they be granted a relief of the stay to get it back?