Questions regarding our chapter 7 case

[teek76]

My husband filed for chapter 7 in June, 2010. I have several questions.
First question- we received a notice for hearing for objection to debtor's claim of exemption. Obviously the trustee is objecting to our exemptions but we do not know what that would be and our attorney says he will not know what the objection is until our hearing. Can anyone shed light on this? We have our home which we have reaffirmed the lien and plan to keep and our vehicles on loan which we hoped to keep also. The house appraised 3 years ago for $185K, there is a $140 mortgage lien and a $40 IRS tax lien on the home. Can they take our home even tho we have reaffirmed the lien with us still owing the mortgage and IRS?
Also, our vehicle lien is for $2400 but both vehicles together if sold would be app. $10K according to KBB value. Any thoughts as to which exemption they might be objecting to?
Second question, we received a letter from the attorney working on behalf of the trustee. We sold a wave runner in April..two months prior to the filing of bankruptcy. The sale was discussed and we were told that we could use the funds to catch up our mortgage payments (since we intended to reaffirm and keep the hosue) and personal bills but could not be used to pay preferred creditors etc. We used the money just as discussed with our attorney and paid our mortgage payments up to date and paid bills (debts not included in the bankruptcy) with the remainder amount. The WR was sold to a random individual with who we have no business or personal ties to and was sold for the selling price as listed in Boat Trader Magazines and online listings etc. (so it was sold for fair market value and was not sold to a family member, friend, or for any purpose of hiding or temporarily displacing property). The issue is that my husband did not list this in the financial statement schedule as having been sold. An oversight or a misunderstanding since the attorney knew of the sale and it was not related to the bankruptcy creditors.. and the attorney did not question it or even notice the failure to list. Now we received a letter from the attorney saying that the sale was labeled and marked in our bank statements (clearly not trying to hide the sale) and he had no record on the financial statement. He wanted to know who we sold it to and how we came to the value or sale price. The letter did not seem threatening or harsh. We honestly responded to our attorney's secretary all that I have just told you here. My question is, will this be able to be remedied by our attorney or are we screwed for having not listed it and our attorney not finding the error before submitting our paperwork? Clearly it is not anything that was done fraudulently or done in an attempt to hide anything. CAN ANYONE GIVE SOME LEGIT INPUT HERE? I am terrified they will consider it fraud and my husband will end up in jail or they will throw out his entire case altogether...... (God this whole experience is horrible and heartbreaking... )

[tcreegan]

take a deep breath...

Hi teek76,

I am terrified they will consider it fraud and my husband will end up in jail or they will throw out his entire case altogether...... (God this whole experience is horrible and heartbreaking... )

Take a deep breath....go to your happy place......relax......

They did away with debtors prisons a long time ago. Unless your husband is con-artist colluding with your attorney, the worst case scenario is your case gets dismissed.

BK's are business matters, numbers on paper, procedures, don't take any of it personally

You do know who is objecting right? can we assume the UST?

Your attorney should know what your state's exemptions are, where your were close to/over the limit, and thus should have a pretty darned good idea what the objection is about.

will this be able to be remedied by our attorney yes, your attorney can file an amendment

Your attorney should have already advised you on the house reaffirmation, the situation w/ the vehicles, the waverunner sale, where your case was weak, what to expect, etc.

Take the words of Douglas Adams to heart: Don't Panic

Hang in there,

Tom in Colo

[SMinGA]

What state are you in? ARe you allowed to exempt $7600 equity in vehicles? I gather that only your husband filed - it will also be pertinent how the vehicles are titled. Such as if they are in his name only, he owns all the equity. If jointly owned by you & him, you each own 1/2 the equity and so on.

For the wave runner transaction - it just seems your attorney needs to amend the petition and/or provide the UST with the requested information. (Transaction details of the sale.)

[tobee43]

teek....i'm not really please with what you are saying about your atty...what tom is saying is exactly correct...

first, the trustee's office should have touched base with your atty prior to your 341....our's did...

actually we filed and within the week the trustee's office was contacting us via email via our atty for any and all questions ...i.e. our means test was off....we had so many expenses...etc...but ALL of that was taken care of prior to the 341.

additionally, at the actual 341 a question did come up (really a few) and the trustee told our atty she would speak with him later with him directly about the situation. we were SCARED to death....we called our atty, and he assured us he was taking care of it and did.

once again i agree with tom, however, you need to speak directly with your atty and tell them look here...we hired you to protect us...sounds like there's a problem now FIX it!

i'm certain it will be taken care of, but some of these atty's just are too much!

[teek76]

Tom,
Thanks for the response. Dismissal is better than jail .. and yet still not a great answer either. But like I said..better than the alternative. We responded immediately with the information they requested, and we even had the sale of the WR highlighted and marked in our bank statements, (I dont know HOW my husband forgot to list it, but frankly, the amount of paperwork and information is overwhelming) . I wish since it was an honest oversight and we clearly did not intend to hide the information that they will consider that and not throw out his case. Guess we will have to wait and see and hope for the best.
Teek

[teek76]

SMinGA,
We are in Alabama. Only my husband filed. Both vehicles are financed on the same note and are in his name only..
Teek

[teek76]

Tobee43..
once again i agree with tom, however, you need to speak directly with your atty and tell them look here...we hired you to protect us...sounds like there's a problem now FIX it!
That is one of the biggest frustrations so far.. our attorney came highly recommended from an attorney that we think very highly of also (but does not handle bankruptcy cases) and we feel like we are getting 'the run around.' Maybe we are wrong and just not seeing it all behind the scenes, but when we call with questions, he's always busy or in court and the receptionist takes our messages. When we have asked that he call us back, 3 out of 4 times, we end up getting a very short email in response from the girls that work in the office rather than the attorney himself and our questions are not thoroughly answered. We finally got frustrated enough that my husband called and said, 'Look..we have questions. We need answers. We need to talk with him'..and so we were scheduled for an appointment to come in and talk with him. (Which, we were told immediately that appointments are always at least one to 2 weeks out..ours was the latter and they made us an appointment for Sept 7th) . So.. our appointment is coming up, but in the meantime, we got the letter for the hearing on objection to exemptions and it is scheduled for the NINTH. Our meeting is only 2 days prior..this panics us a bit because when we questioned this, we got the usual email reply just saying that it was sorta standard and all they would have to do is amend the schedules. The email also said 'You are only allowed $3000 personal property and anything over is open for the court to be sold if desired.' My husband does not even remember how much we had down for personal property, so when I asked- Did he go over the $3000 and did he know to value this at a resale/garage sale type price?- I got a short email back saying to write down ALL of our questions and bring them in on the 7th so that we can directly discuss things with our attorney.
I do not want to 'bash' our attorney or be entirely negative..he may be doing his job just perfectly behind the scenes and we just have no idea what's actually going on..but that's an issue in itself with me. I have dealt with attorneys before (previous divorce) and my husband has dealt with attorneys regularly for the business he owned...and we have ALWAYS been able to get the information and answers to our questions. In fact, it seemed they went out of their way to keep us informed and reassure us as needed. I know he is not here to babysit my emotions so to say..but come on. Even now, with the latest worry of whether or not it's a major issue (dismissal or jail) concerning the issue of the sale of the wave runner..there is NO communication to us from his office.
We are just being as prompt as possible..any email requesting additional paperwork or information, we (I) have immediately responded (I am a stay-at-home Mother) and been timely with a reply.
My husband actually called an attorney that he has used throughout the years (does not handle bankruptcy cases), and he just kind of laughed it off and said that he spoiled us by always taking our calls, answering our questions and being available. He said he wouldn't be too concerned with it and that lots of attorneys do things differently but that he feels certain ours is doing a good job. I, however, feel like we are paying our attorney to work on our behalf and to represent us...and we can't even speak with him in a timely manner or get thorough answers to our questions.
Maybe I am just over-reacting and really anxious, but this is not just another case for us..this is our life...so it's more than a 'big deal' for us....
Hopefully we will get all the answers we need when we go for the meeting on the 7th.. I just really wish he could set our minds at ease a bit by at least clearing up the questions and concerns with hard fact answers and stop any unnecessary worrying on our part.
If I survive this bankruptcy without a nervous breakdown then I guess that will be a miracle! ;)
Teek

[SMinGA]

From what I can find on AL exemptions - they are not very generous.

$3,000 wild card for personal property, to cover everything except books, clothing, pictures, tools of the trade. (Those things are exempt without a stated value - also a church pew!) Unless I'm misreading it - that is all one can exempt on total personal property. Including vehicles, cash on hand at time of filing, furniture, misc. possessions.

The trustee may be disagreeing with the way some items were valued, or lack of listing items. SUch as if the ONLY assets listed are home & cars - the trustee is assuming things were left off. Unless your husband lives in an house that is empty except for books & clothing & pictures & tools of the trade.

You should be able to claim certain items are yours - such as items purchased solely for you. (My husband stakes no claim on my treadmill, and I claim no part of his pool table - for example!) Or items you owned before married. Much of what you own, though, is probably owned jointly. So if you summed up that your furniture, electronics, home furnishings, etc. are worth $3000 total - then $1500 of that is your husband's. Plus the $7600 value in cars - and he is well over his $3000 in exemptions. Plus his share of any cash on hand or in your bank accounts as of when he filed: results in a lot of non-exempt value.

His attorney should have discussed this with him.

[teek76]

Our attorney has not been helpful at all. We have tried to get answers from him and all we have received is an email stating to write all of our questions down for our meeting scheduled for Sept 7th. (hearing for objection to debtors claim of exemptions is scheduled for the 9th)

I found our forms on pacer and even tho everything I have read states that Alabama has an exemption on clothing, tools of the trade, etc.. they included my husband's tools and clothing in our listing of exemptions. The document for the OTDCOE hearing simply states that the debtor is over the $3000 personal exemption allowance by State of AL code..
Here are the personal property items lsited..
$1000 in checking account -H
$7000 vehicles- J
$2000 household goods (furniture,etc)
$400 clothing and shoes
$2000 tools
$155 deposits (water, power, etc)

If we truly ARE exempt from clothing and tools, I dont understand why our attorney listed these items? Clearly, the money in the bank, and the vehicles are a major issue. Think it goes without saying that we are not going to be able to keep our vehicles even tho we can now pay the loan amount and need them .
But..any input? I am seriously going to lose it before this is all settled. As far as I can tell, we will be (if lucky enough to keep our home which we did reaffirm) sitting on the floor without furniture, clothing, a means of transportation to work, or an ability to continue working bc he wont have any tools. Not a great outlook.
I do realize this means nothing to the trustee as he is there to look out and recover for the creditors..but it is completely overwhelming for us!! And I really don't see why things were not made more clear for my husband when the schedules were filled out. Like, maybe a heads up of 'hey..you're allowed $3000 and this list totals $12+ ... ??'
I am so stressssssssssssssssssssed and confused.
Does this objection hearing and the settling of assets mean that we will go into adversarial proceedings? or do they usually handle these issues in time to discharge etc. Not sure what we should expect at this point.

[tobee43]

I am so stressssssssssssssssssssed and confused.
Does this objection hearing and the settling of assets mean that we will go into adversarial proceedings? or do they usually handle these issues in time to discharge etc. Not sure what we should expect at this point.

i know you most likely not like this response....but i would kiss our atty's ass to the curb and get another atty...ask for a continueous due to an atty conflict...after all atty's are allowed to withdraw at the tip of a hat...

don't go on with this firm, if you are that uncomfortable...your instints are telling you something, so i would listen to them.

make calls...try other firms...tell them you need help now...i bet you, you will an atty that would be most willing...and also i understand it will cost you more, but it well worth it in the long run..trust me.

[teek76]

I just got on pacer and it had been updated to show that our attorney filed a reaffirmation agreement for our vehicles. It was dated after he received notice of the trustee's objections to exemptions..so I am confused.
I agree.. I'm not crazy about your response, but I feel that if things do not seem to improve or we do not have a better feeling after our meeting with the attorney next Tuesday..choosing another attorney and starting again with a new one may be our only option. I don't really know how I feel. I feel one minute like we aren't being advised well but the next minute it seems he is working to do things on our behalf and just the communication is poor, so I dont know really.
If he thinks/knows that the trustee is going to come after our vehicles..why would he go thru with the reaffirmation?? That throws me off a little. I mean, the reaffirmation is up to the judge and will not save our vehicles from being taken, will it?

[SMinGA]

He would have to list and claim an exemption for them. (Tools of the trade and such, I mean.) There should be an exemption code claimed, and the code for the tools of the trade would be different than the $3,000 general allowance.

Tools of Trade is 31-2-78

Clothing is 6-10-6

$3000 Wildcard is also 6-10-6, but the clothing comment did not indicate an amount.

I would be concerned with the cars being listed as Joint. You said only he is on the title. But the atty listed full value not just your husban'd 'half' so that might not be an issue.

[teek76]

I looked into the 31-2-78 tools of your trade. That is simply for state military and the exemption applies to all the uniforms, equipments, arms etc they are required to keep. So.. unfortunately that doesnt cover us.

[tobee43]

Oh!! yes, we did...we listed guns as tools of the trade...one of us carries two...at all times for work...when working.

they counted as "tools" of the trade...and by the way NOT assets.

[tcreegan]

up a creek in Alabama

Hi teek76,

You have big problems.....Alabama exemptions are terrible and you can't use the federal exemptions.

$1000 in checking account -H
$7000 vehicles- J
$2000 household goods (furniture,etc)
all clothing/shoes exempt
$2000 tools
$155 deposits (water, power, etc)

Total = 12,000
Alabama exemption = 3,000

W/ your numbers you are over the exemption amount by 9,000

Your attorney should have known this....

Some help....recheck the value of tools, furniture, etc What would the value be if you were selling them in a garage sale or on craigslist? Most people seriously overvalue their stuff.

Try Property of a Business Partnership 10-8-72 (b)(3) for the tools

Good luck with this, you may need it.....

Tom in Colo