Trustee filed "No Asset", now coming after assets ????

[BMGinFlorida]

Hi, here is my backround... I originally filed in Aug 2009. At my 341, the trustee said she would object to the value of my assets, which she did. I filed an amended Schedule C on 12/08/09. This Schedule C ONLY changed some assets from Florida exemption to tenancy by entireties exemption, since my wife did not file. There was no addition or removal of any assets from my schedule. On 12/17/09 the trustee filed "Report of No Distribution". Unfortunately, my amendment was rejected by the court for failing to file a sworn notice of service. I re-filed the amendment on 01/06/10, again with no change to any assets... and on the same day the Trustee objected to my exemptions!

The discharge was issued on 02/23/10. Yesterday (03/03/10) I receive a call from an appraiser, sent by the trustee!

Very important to note here that the assets on the Schedule C have not changed since the initial filing, but only the class of exemption.

Can the trustee do this, and if so what can I do to fight?? Can I hold her to the No Distribution report?

[justbroke]

Yes the Trustee can do this. Whenever you update your schedules, the Trustee can object to what's on them. Claiming tenancy by the entireties (TBE) is not as easy as you probably thought it was. Real Property (and personal property) needs to be actually titled as such in Florida. There is no automatic TBE in Florida because this is not a community property State.

A "No Distribution" report is not final until the discharge is entered. Even then, the Trustee can still, for cause or for excusable error, vacate a discharge. But appears that they filed before the discharge anyhow. I would object too, because you tried to change it from, apparently, Florida Statutes that didn't apply or used the wrong statutes to start, then claimed a TBE exemption.

[BMGinFlorida]

Thanks for your reply.

Florida statutes did apply. Trustee was only challenging the value of the assets. In the newest objection, trustee is still challenging only the value of the assets, not the TBE exemption itself.

TBE has, in fact, been applied in Florida, which is a TBE state. It has even been upheld in the middle district bk court, which is where I am.

I called trustee before filing TBE to tell her what I was doing, out of courtesy. No change in schedules happened between her No distribution report and her new objection.

I intend to fight her on this, even if I have to go back to the judge.

Since the discharge has been entered, does she need to file something to reverse it?

[justbroke]

I'm sorry if you thought I wrote that TBE doesn't apply in Florida. I'm in Florida and I know it applies, but it depends on how the item it titled.

She does not need to fight the discharge. She's fighting, at this time, your allowance of exemptions and how much the Bankruptcy estate is entitled to liquidate. That has nothing to do with the discharge. However, if the Trustee prevails and you fail to turnover the property to the Trustee, the Trustee can then ask to dismiss your case and to have the discharge vacated.

If the Trustee is challenging the value, and you marked it as TBE, then the Trustee is in fact challenging the TBE. If it were TBE, the Trustee couldn't challenge the value as it would not be part of the Bankruptcy Estate.

[BMGinFlorida]

Thanks for the clarification on TBE in Florida. By the way, since the Beal case in FL Supreme Court in 2001 (which established bank accounts as TBE assets) most Florida courts have extended TBE to include personal property and joint tax refunds as well, including a ruling in the middle district of Florida. So it no longer requires a titled asset, according to these rulings, which is what I am basing my filing on. Do you agree?

But, back to the trustee. She filed objections to asset value way back after my 341. She actually filed the No Distribution report AFTER I filed TBE.

But here's the thing... see what you make of this please. The judge's order sustaining her objection said the following. (You probably know already, but article X is personal property and section 222.25 is vehicle exemptions in Florida). Number 3 was just about disputing the value.

"It is appropriate to sustain the objection for the purpose of preserving the Trustee's right to contest the valuation of the property...

ORDERED:

1. The objection to exemptions is sustained to the extent the value of the claimed property exceeds the allowable exemptions under Florida law.

2. To the extent Debtor has claimed personal property as exempt in schedule C under article X, section 4 of the Florida Constitution or section 222.25, Florida Statutes, the debtor shall be limited to the amounts of the aggregate personal property and vehicular exemptions provided for by those exemption provisions, and all property that exceeds such amounts shall be deemed property of the estate.

4. This order is without prejudice to the debtor's claim that personal property is exempt or immune under any provision of the law other than article X, section 4(a)(2) of the Florida Constitution or section 222.25(1) and (4), Florida Statutes.

[justbroke]

As for personal property and TBE, most of that has to actually be in both names of the parties claiming a TBE exemption. Such as on a joint tax return where both names appear. The Trustee may think that you have pre-marital property, not purchased with marital income, that is not subject to TBE.

Sounds like the standard blurb for "automatically" issuing an order sustaining Trustee objections to exemptions.

As for Beal, it's not as all inclusive as you think. Beal only extended the presumption of TBE to financial accounts and went no further. Remember, that a financial account has certain aspects from a fiduciary standpoint which allows joint ownership. I don't see this extended to "any property" as I think you may be thinking.

In Beal, the court extended a presumption of TBE ownership to peronsal property unless otherwise indicated. For example, in Shilo, a Middle District Case, the Judge found that a car titled with "or" was explicitly NOT a TBE. Therefore, the "presumption" only exists when there is ambiguity (Beal). I have no clue what you tried to claim as TBE, but I still don't see it as cut and dry as you think Beal makes it.

Clearly, the Trustee has preserved his/her right to challenge your valuations. Clearly, you will need to be able to articulate the why your valuation wins or why all your property is TBE.