Paying Asset Balance in one lump sum?

[BillsFan]

Just wanted to see how they verify if you can repay the Asset total. In other words, lets say you owe $6000 in assests to be paid back to the Trustee. You offer to pay back a lump sum of $5000.

Does the courts or Trustee do some kind of income verification of how you came up with the ability to pay $5000? Do they require recent bank statements or anything like that?

[pandacb]

Good question. Here in Oregon we can't have much cash at all and the trustee will give 90 days or so to buy our car back. I posted this question last week under exemptions.

[spetkovich]

Trustees do not calculate payment for the value of over-exempt assets based on income. The repayment is based on the value of the assets, not on the availability of cash to pay over to the Trustee. If you owe $6,000 for the over-exemptions, you will have to pay whatever amount you can settle with the trustee for. It is not based on your income.

Addtionally, the Trustee should have asked for all of your bank statements for at least three months prior to filing before the 341 meeting. The Trustee would know if you had $5,000 in cash sitting in the bank or in your home per your schedules and the required documents. This would be an over-exempt asset in itself, most likely, depending upon applicable exemption laws.

If you DO pay your over-exempt value in a lump sum, it could trigger additional scrutiny by the Trustee, i.e. looking into whether you were hiding the cash to pay this off and wrongfully failed to disclose something on your schedules.

[pandacb]

so, in other words, trying to figure out how to redeem a car that you need to drive to work is a "catch 22."

[BCA2009]

so, in other words, trying to figure out how to redeem a car that you need to drive to work is a "catch 22."

Not at all, at your 341, the trustee will ask you if you want to buy back the unexmpt equity in your car or whatever you have unexempt equity in. You say yes or no. He will then ask how you will pay it back. In our district our trustee allows you to pay it back in 12 equal monthly installments. Interest free! Or you could borrow money from relatives or whatever way you can come up with it.

If you can't afford to buy it back, you tell him and he will either sell the asset and give you your exempt amount. Or he may abandone it if it is too much trouble to sell.

If the unexmpt amount is not too high, you can play chicken and hope the trustee thinks it's not worth the effert to sell it.

In our case he made us pay the unexempt amount in the car, but didn't make us pay about $1,600 in unexempt household goods. We didn't try to negotiate, because we thought this was very fair.

Just be truthful and most trustees will work with you, from my experiance, and what I have read.

[pandacb]

We have been told to expect 90 days allowance of time to come up with @$5,000.00 to get our car back. The exemption here for your car is $3000 which makes it difficult if you own a subaru that has held its value. I really can't imagine a scenerio where the trustee would be kind and give it back to us for whatever we could scratch together in 90 days. Do other people really have friends and family with that kind of cash? We sure don't.

Sorry to sound cross with you but you've painted a very idealist picture and we're dealing in stark realities right now.

[BillsFan]

This kind of stems from my original question, how do they verify the funds to pay it back. I realize they ask for bank statements before the 341 meeting, but there could be a 6 month time frame between filing and when the Trustee negotiates his payback. A lot can happen in the time frame after the meeting.

Thus, how do they verify how you will pay? Even borrowing from a family member, how do they verify that is legit?

[spetkovich]

Caveat: The answer to this question depends a lot on individual Trustee's and district practices. My answer is just based on my district.

As long as it is post-petition money, the Trustees do not generally inspect the source of the funds. If you pay lump-sum with a sufficiently large amount, the Trustee may question where you got the money from simply so as to verify that it was not actually a pre-petition asset.

Most Trustee's will offer to let you pay back the non-exempt equity in the vehicle over the course of up to twelve (12) months. You are not always stuck to the 90-day timeframe as mentioned above. However, even given the expanded 12-month timeframe, the solution is not always a financially easy one. Though it is not easy, there is no quick fix, and you will have to come up with the value of the over-exempt equity somehow, or forfeit the vehicle.

[BCA2009]

We have been told to expect 90 days allowance of time to come up with @$5,000.00 to get our car back. The exemption here for your car is $3000 which makes it difficult if you own a subaru that has held its value. I really can't imagine a scenerio where the trustee would be kind and give it back to us for whatever we could scratch together in 90 days. Do other people really have friends and family with that kind of cash? We sure don't.

Sorry to sound cross with you but you've painted a very idealist picture and we're dealing in stark realities right now.

I didn't mean to sound like it was all roses. But rather that the trustee follows the rules for the district and is not out to audit what funds you have 3 months after your filing date. I agree, if you said you had 50K in cash to buy back assets, that might raise questions. But if you tell the trustee someone is loaning you 4K to buy back you car, he doesn't care.

Also he doesn't really care if you don't buy it back. He will either decide it's worth while to sell it himself or he will abadone it. And he might not make that decision for a while, which will leave you in limbo, which sucks!

In the cases that I watched he offered a 12 month note to pay back for unexempt equity. He had you sign the note right in from of him. No other questions were asked. I assume if you couldn't make the payments you would not sign the note. Everone that I saw was for vehicles and were between 2K and 8K. Florida only has 1K exemption for cars so alot of people have unexempt value in them.

The only advice I can offer is to be honest with the trustee and tell him what you can afford to pay. If it is nothing and you have alot of unexempt value then it is out of the trustees hands, he is obligated to sell it for the benefit of the creditors. But my trustee was very fair. Maybe others are not.

Good luck.

[pandacb]

thank you. this is the first I have heard of it taking some time for the trustee to make his decision. I thought it was all "said and done at the 341."

[BCA2009]

thank you. this is the first I have heard of it taking some time for the trustee to make his decision. I thought it was all "said and done at the 341."

The trustee might or might not accept your "appraisal" of the car value. Just because you list NADA avaerage retail, the trustee might want to have it appraised by a salesperson he trusts. This will take time. I assume he would do it relatively quickly but not at the 341.

I saw two instances where people had older sports cars that they listed at a low value and he wanted them appraised before he made a decsion to abandone them or not.

Homes and other harder to value items (and even household belongings) are frequently appraised by the trustees representatives after the 341. Then the trustee tells you what he wants you to pay and you can counter just as if you are negotiating to buy something. The trustee is in a little better negotiating position, but he only want to get easy money out of the deal. He doesn't want to spend alot of time trying to get a few more dollars out of some asset. He needs to move on to the next case.

[BillsFan]

We had our 341 meeting back in Jan. and we still have not heard what we owe. We got our Discharge April 12 and are just waiting to hear from the Trustee.

I know the trustee gave "proof of claim" deadline of June 7 so does that mean we will hear back on the amount we owe by then?

Our Attorney is no help, I have asked and he just says, "Don't worry about it, just continue to put money aside."

[pandacb]

I'm getting a better picture of this. Thanks

[BCA2009]

We had our 341 meeting back in Jan. and we still have not heard what we owe. We got our Discharge April 12 and are just waiting to hear from the Trustee.

I know the trustee gave "proof of claim" deadline of June 7 so does that mean we will hear back on the amount we owe by then?

Our Attorney is no help, I have asked and he just says, "Don't worry about it, just continue to put money aside."

The Proof of Claim deadline is for your creditors to put in a claim to get part of the assets the trustee gets from you. Only the creditors that submit a proof of claim can get a share of the proceeds. But that doesn't mean that the trustee will have all of the assets settled by then.

[BillsFan]

What if the trustee says our assests total $10000, but there were no proof of claims filed. Does the trustee keep all the money no matter what, or after his cut, would whats left be returned or subtracted from total?