341 Today - Question about US Trustee

[dmbshop]

I have been seriously lurking for the past couple months as we have prepared our Chapter 7 case. Just wanted to come forward and say thanks. We had our 341 today. As so many say, it was no big deal at all. I am so glad it is behind us, so now we are counting down.

I do have a question though. Our attorney explained that our case might be more of a concern for the US Trustee since it is a higher income Chapter 7. Does anyone know how long is typical for questions/concerns to arise from the US Trustee if they are going to? Thank you in advance.

[adm]

I am curious to see other's advice. Ours is a higher income Ch 7 as well (filing tomorrow, OMG)-- only w/exemptions, etc where we able to get to Ch 7 but this includes my spouse's UI (unemployed since Fall 2008) so he doesn't have much benefits left, so hopefully the Trustee if he/she would otherwise raise an eyebrow...would decide not to since spouse is close to having no UI...(ok, not trying to hijack thread but didn't know your income level could be an issue - I mean if you pass the means test, you pass the means test, right?)

[Meatstick]

They say it brings almost certain scrutiny by the UST if your over the median income and/or have over $100k in unsecured debt.

Reading these forums members have had different experiences when being over the median. Sometimes the UST shows up at the 341, sometimes within 10 days of the 341 they get involved, sometimes just days before discharge is due and other times the UST doesn't get involved at all.

There really is no reasoning as to what,why or when as we all have different circumstances. What might trigger your UST may not trigger the UST in my district and vice versa.

In our case we were in the $140k-$150k bracket on an annual basis and way over the median on the 6 monhs look back. We passed the means with expenses and Schedule I & J Current Income and Expenses showed we were good for a Ch7. We were only asked 4 questions at our 341, no creditors showed up, no UST, no contact by UST before the 341 and have already received the Report of No Distribution which basically means that the TT is finished with us. Now we are on the 60 Day wait and also this is the prime time for the UST to start sniffing around. Our attorney says he doubts anything from the UST but there is always the small chance so we just sit and wait as we have nothing to hide and our schedules reflect that.

ADM just because you passed the means test doesn't necessarily mean you are golden for a Ch7. You need to look at your Schedule I and J for future Income/Expenses and if your still showing a negative DMI then yes you should be ok. If not or your close or claiming outrageous or non-allowable expense this is where the UST may get involved and move to dismiss or push you into a Ch13.

Good luck !

[dmbshop]

Thank you both. Meatstick, we sound fairly similar in our cases. I guess I will continue to hold my breath for the next 59 days and pray for the best. I guess this is definitely a "no news is good news" situation. Good luck to you, both.

[GettingGoing]

Yes, after the report of no distribution is filed by the TT then no news is good news. I just wish my TT would file the report of no distribution.

[blockhead]

My case was 60K above median (high mortgage so passed means test), self employed through a couple of C-corps, 280K CC debt - probably at least half of that corporate with me as cosigner, but because of mortgage was a consumer case. UST made a 'highly detailed documentation' request in a letter to my atty the day after the 341 'evaluating whether they would seek a discharge under 707 or 727. I provided that (the more of a mountain the better in a way) and heard nothing for a couple of months when they called and said all was OK.

30-40 days afer that I finally got a report of no distribution after providing more stuff to panel trustee (and after orders to extend on exemptions and ch7 trustee discharge objections)

It was a very nerve racking 4 months.

[dmbshop]

Wow, that must have been a "nail-biter". Glad that it all worked out. I did check and the trustee from the 341 did write us off as no distribution, so now.....we wait.

[albacore44]

in my case I was told the UST would probably look at my case do the the large amount of CC debt, but not to worry because the UST doesn't challenge my attorneys cases because he wins them every time. so 341 comes, no UST, things looking good. 60 days ticking away. day 59 i get the dreaded call, the UST is looking at your case and will probably want an extension...sh--... so I gave my attorney the info he asked for, and he called the UST...........I waited, blood pressure rising all weekend. Call the attorney monday, the UST blew the 60 day deadline and never filed for an extension......discharge

[2manybills]

We were over median and the only question the UST attorney's paralegal emailed to my attorney was "Were we keeping the house?" That was it. Other than no contact, no nothing. We were in and out of our 341 hearing in less than 3 minutes.

[adm]

Hi again- so my 341 is tomorrow-- and I just checked on pacer for the first time...and it lists a US Trustee at the top where all the parties are listed (me, my atty, the trustee, and UST): is this normal or does this mean the UST has flagged my case? My atty hasn't said anything. On Schedule J is shows a negative DMI. maybe it's b/c before exemptions we were over the means (including spouse's unemployment which are set to end here quickly)...debt is 50K cc, 160K student loans & we are current & keeping our house & car.

Guess we'll see?

Also if later the trustee files no distribution then does that mean we're in the clear or not until the 60 days after the 341?

Trying to keep positive...

[backtoschool]

Whatever the panel trustee files has nothing to do with whether or not the US trustee will get interested in your case. You can be declared a no-distribution, no-asset case by the panel trustee and still have your income and expenses questioned in detail by the US trustee.

Some people do not hear from the US Trustee until day 59 after the 341, so you are not completely in the clear until that deadline passes.

In high income cases, the US Trustee often gets involved if there are high expenses on your schedule that are over the irs standards. The US trustee will be looking to disallow or reduce some of those expenses so that money will be freed up to put you into a chapter 13 plan instead.

[ugghh]

Whatever the panel trustee files has nothing to do with whether or not the US trustee will get interested in your case. You can be declared a no-distribution, no-asset case by the panel trustee and still have your income and expenses questioned in detail by the US trustee.

Some people do not hear from the US Trustee until day 59 after the 341, so you are not completely in the clear until that deadline passes.

In high income cases, the US Trustee often gets involved if there are high expenses on your schedule that are over the irs standards. The US trustee will be looking to disallow or reduce some of those expenses so that money will be freed up to put you into a chapter 13 plan instead.

This part always confuses me. Can someone explain how the UST does not get involved until day 59? I thought they had to file something within the first 10 days after your 341 if they were going to request more information.

[chriselle]

i am over the median, the UST showed up at my 341 but defended my schedules very well. If the UST did not show up, chances are you are good to go. Then again, before the 10th is the formal day to file. but until 60 days the UST can motion 707(b)(3) totality of circumstances.

[Fallonedward]

I am curious to see other's advice. Ours is a higher income Ch 7 as well (filing tomorrow, OMG)-- only w/exemptions, etc where we able to get to Ch 7 but this includes my spouse's UI (unemployed since Fall 2008) so he doesn't have much benefits left, so hopefully the Trustee if he/she would otherwise raise an eyebrow...would decide not to since spouse is close to having no UI...(ok, not trying to hijack thread but didn't know your income level could be an issue - I mean if you pass the means test, you pass the means test, right?)

This is our situation as well. With just my income we are below the median income for a family of 5, but with spouse's UI we are $600 over. We have to wait till October so that our 6 month look back reflects our true circumstance now vs the severance lum sum payout.

With our monthly payment back to our 401K we are in a negative DMI but if you take that out we show a $300 DMI...Do you think the trustee will try and put us in a 13?