Trustee's motion for extension of time to seek denial of discharge under 11u.s.c 727

[montana59451]

18 days before the last day for creditors to object to discharge TT (not UST) files the above referenced motion. We filed pro se non consumer. We had a 341 (1st) on 4/4/10 continued 341 meeting on 4/19 and the UTS was present at the continued meeting and filed nothing. The TT was given the tax returns for the business and personal, she was given our tax refunds (which made this an asset case which she did yesterday which was fine because we knew it). The UST is not objecting to anything at this point.

The motion she filed states:
"The Trustee in the above-entitled case hereby moves the Court for a 90-day extension of time to file a complaint objecting to discharge under USA 727. Without an extension, the time period for filing such a pleading will expire on June 4, 2010. Trustee is reviewing the documents she requested from the Debtors and investigating their various businesses. Trustee anticipates she will need additional information from Debtors to complete her investigation. Trustee will not be able to determine what additional information she needs, request and receive that information from Debtors, complete her investigation and determine if she will object to discharge before June 4, 2010. Trustee requests an extension of the deadline to file a complaint objecting to dischargebility through and including September 2, 2010."

Of course the Judge granted that request.

There shows no basis for this motion, no creditors have objected (yet) and we have received no letter requesting any additional information to date.

Does this extend the time for Creditors to Object?
What happens if the TT objects to the discharge? Will it be dismissed?
If it is dismissed can we refile in 180 days?
Would we be better off requesting a dismissal ourselves and refiling at a later date?

We want to close the business that she is interested in (which is a 1 truck trucking company) and have had no money come into that company since 2/22 (right before we filed). It is still open (in name only) because I do not know if we can dissolve it while in BK.

Thoughts? HELP!

[blockhead]

Well I got one of those too, for 60 days, I think because the Ch7 trustee was waiting for the UST to complete their audit. btw my lawyer says it does not give creditors any more time.

[montana59451]

Does the UST always do an audit? This is scaring me because we told the truth and gave TT everything she wanted. Does the TT always do this on behalf of the UST?

Does the TT have to file what further documentation she wants or just send a letter?

[ironpirate]

Seems that they do most audits on people who were self employed or had a business.

[montana59451]

Is the title of this motion always what they call it? Maybe I don't have anything to worry about?

[justbroke]

I wonder what the Trustee is even looking into. Sounds like they haven't done ANYTHING. At lest some Districts don't rubber stamp the Trustee's desire to extend, solely because they haven't had time to figure out whether they need more time to figure out whether or not they should seek a dismissal before time is up. Silly and sad.

Maybe the continued 341 Meeting is what complicated things a little, so they did lose at least 2 weeks.

I wish you the best of luck. At least they did this 18 days before the deadline, rather than waiting until day 60 and asking. I think the asking for an extension on day 42 gives it more credibility than asking on day 60.

[montana59451]

Justbroke

I agree this is silly and sad. But they still had 30 days to look at what I gave them. There were no requests for any further documentation from the TT or UST and so far there are no creditors objecting. I hope that this is a big nothing.....not the beginning of a real headache. Seems like 90 days however is a long time.

I suppose I can't do much of anything at this point until something happens. Will there be some type of hearing?

[montana59451]

Can I close down the LLC which is still open and not doing anything?

Does the TT have the right to get into any income we have earned after our 341? This income is seperate from the LLC.

We've had no creditors object to anything and I don't think they will so I guess I don't understand this part of the procedure. I just want to get on with my life!

[justbroke]

I have no answers. The LLC may be "property of the estate", so you should coordinate this with Trustee. Whether business assets are property of the Estate is a legal question. To the extent that the Trustee owns the business or stands in your shoes, will determine a lot of this. Pre-petition accounts receivable (earned but not paid by the client) are certainly property of the estate.

Proceed cautiously. Please understand what's in the Estate and what you can't touch!

[montana59451]

Well the LLC has had no business nor income since 2/22 and we filed on 2/25. There were no A/R so for all intents and purposes is defunct. If she wants it she can have it and run a non-going concern

[montana59451]

Now that my initial "panic" has subsided, it appears that the TT is simply requesting more time to "digest" the paperwork which was given to her at her request.

There is nothing to hide, but from the timeline of what has transpired, she is just slow in doing what she needs to be done. For example, she received our check for the tax refund on 5/6 but did not deposit it until 5/17. I actually had to call her office to be sure that they had received the check (the answer the sec'y gave me wat to the effect, yes we got it but she has not had time to go and deposit it). It also seems to me that she probably did not even look at our case or paperwork until the 19th when she filed the motion. There have been no requests for paperwork since our continued 341 on April 19.

Is there any significance in the fact that this motion for extension was made by the local TT and not the UST?

If no creditors object will that make it easier for her to drop this mess? Isn't a 90 day extension a rather long time?

Also, she filed the motion and filed it and then within 45 minutes the judge signed the order to extend it. Is that usual? We had no chance to object?

[justbroke]

Is there any significance in the fact that this motion for extension was made by the local TT and not the UST?

The panel Trustee (or TT as you call it and "Tee" as they call it down in Florida), can file an extension, but that's usually for an asset case determination or exemptions determination.

The TT is usually not the person filing a motion to extend the time to object to dischargeability. However, it reads like a pure motion to dismiss under 11 USC 727 as a general "you don't deserve' a discharge and it's usually because of fraud or you hindered or delayed the proceedings or creditors in some way.

In other words, they think you are lying on your petition.

Whether any creditors object or not have absolutely no baring on the administration of the case from the panel Trustee or OUST perspective. Each has their own right to object.

Also, she filed the motion and filed it and then within 45 minutes the judge signed the order to extend it. Is that usual? We had no chance to object?

The only time a panel Trustee files a motion to dismiss under 727 is when they believe there is fraud or that you shouldn't be in a Chapter 7 at all. I haven't read many cases where the panel Trustee files a motion to dismiss.

[montana59451]

We did not lie, nor did we delay the proceedings. She did change us from no asset to asset because of the tax returns (a whopping $1768.15). When I actually read the motion for extension calmly it states that she does not really know if she will object she wants the 90 days to decide.

There are some things about our business she just does not understand such as factoring accounts receivable (that is where invoice are purchased at a discount the same day they are generated). She did not like that on our P&L they were listed as "bank fees-factoring". She could not seem to understand that concept and therefore we had NO accounts receivable.

She has not requested any additional information at this point so I guess we will just wait and see what happens. I would also imagine that we will have the opportunity to refute whatever she may say or decide?

[blockhead]

The panel Trustee (or TT as you call it and "Tee" as they call it down in Florida), can file an extension, but that's usually for an asset case determination or exemptions determination. The TT is usually not the person filing a motion to extend the time to object to dischargeability.

In my case and a few others I noticed, they did so. Panel trustee requested more stuff and wanted 60 days to check it out and maybe ask more questions so they said. The requests for info were pretty much along the same lines as the things I'd already supplied at or soon after the 341. They were cc'd on the UST's letter to my attorney asking for a load of documentation and I think they deliberately dropped the ball until the UST's time to object had passed.

[banca rotta]

I noticed from other filers that they mostly scrutinize those that file pro se and those that have or had businesses.

It seems that you have a business and no attorney so they are just double checking everything.

It does extend the time the creditors can dispute something but chances are they won't unless they have good reason to do so.

How this ends up no one can tell you, but if your ducks are in a row chances are nothing bad will happen.