US Trustee was Unjust. Yes/No???

[androoo]

Me and my wife filed for Chapter 7. During the 341 meeting the us trustee asked if we had the engagement ring. We produced the ring with a $5000 appraisal. He seized the ring. Infuriated, i calmly told him that i would rather voluntarily withdraw the case than have my wife lose her wedding ring. He agreed to the withdrawal and told me that i would have to give my lawyer $5000 (which in turn was paid to the trustee) to get the ring back immediately and then file for dismissal.

It only occured to me now months later that he had no right to take $5000 when i was withdrawing the case. There should be no assets seized when voluntarily withdrawing, after all he has not paid my creditors, ive worked out a plan and borrowed money to pay my creditors.

I have written to my attorney who filed the chapter 7 and have demanded my $5000 back.

Am i correct>???

[despritfreya]

Was your case dismissed? If so, the Order Dismissing should have some language as it relates to the payment you made. Find the Order and let us know what it says.

Des.

[androoo]

Yes. It was a voluntary dismissal. I have letters from the judge dismissing me and from the trustee dismissing me. No languagae about payments are found anywhere in the letters.

[androoo]

I think he made a big mistake by not refunding the money when the application to dismiss was filed.

[despritfreya]

Yes. It was a voluntary dismissal. I have letters from the judge dismissing me and from the trustee dismissing me. No languagae about payments are found anywhere in the letters.

Then you really need to go back to your attny to find out why you paid $5K and what happened to the $$. If the case was dismissed there would be no distribution to creditors. Who got the $$ - your Trustee or the United States Trustee? A 7 Trustee is only paid based upon what he distributes. Get an accounting then post your findings.

I handled one case where we did "buy" the dismissal but the $$ paid covered the Trustee's legal fees and costs. We were all in agreement with the outcome. Further the dismissal was by stipulation and Court approval and fully disclosed the deal that was cut.

Des.

[androoo]

Des,
Thanks for the responses... At the time i was very emotional and was not thinking clearly. This was about two months ago. I was just sitting today and thinking "what the hell did i pay for"? Here i am paying off all my creditors so he certainly did not distribute the money to them...To answer your latest questions the US trustee got the money via my attorney.

Here is the email i sent my attorney just an hour ago..

"We feel that the US Trustee was completely incorrect in demanding the $5,000 payment for the return of my wife's wedding ring. The fact that the US Trustee Mr ***** took $5,000 from us in exchange for an asset of ours when we were voluntarily withdrawing our case is completely unjust. I could see if we were continuing with the case, but the case was voluntarily withdrawn. I expect and demand our $5,000 back immediately. I need a response on this immediately or i will be forced to take action on this through whatever means possible.

Where did this money go? It certainly didnt go to our creditors whom we are almost complete in paying off. There is no justification for the US Trustee's office to be entitled to this money. Again, i demand the repayment of the $5,000 immediately. I should demand the interest on this money as well.

I expect you to handle this as you were paid as our attorney to file and dismiss the case.

This is criminal and should be reported."

[olivies]

This is just scary sounding.

[drowningNIL]

wow that is awful. I hope you get this resolved.

[tobee43]

this has to be the bottom of the barrel...i'm so sorry this happened to you...how low can a trustee go??

i really think they had no legal right to attempt to seize any of your property...something is really wrong here...

[despritfreya]

I agree with the others. As an attorney who has done nothing but bk work for the past 22 years, if what the OP states is the whole story then the UST in the OP's district appears to be corrupt. Where did the money go? Whose pocket did it line? Is this a story for 60 Minutes?

Des.

[HHM]

Why did you have it appraised?

Why did you bring it with you?

There are problems all over the case but none of them have to do with the Trustee.

When it comes to jewelry; First, does you state have some sort of exemption for jewelry? Second, you go to a pawn shop to get a value estimate. Third, you NEVER list it as non-exempt, always claim the exemption and force the trustee to go to court and object to the value.

[Pandora]

I was wondering the exact same things as HHM - why didnt the lawyer exempt it? I wouldnt of turned it over to the trustee on the spot - there are motions that should've been filed to turn over any non-exempt properties in X amount of days.

I was under the impression from reading BK rules that the 341 is an examination only and not meant to turn over assets on the spot - that would come later, if needed.

[Cristo]

I agree with HHM, if this story is true, either you had the worst lawyer ever, or he is in on it with the trustee. Did your lawyer tell you to bring the ring with you? That is crazy. You are entitled to due process before they can seize anything. The trustee is not a judge. Things always appraise for more than they are really worth and you should not be reporting the appraised value on schedules or paying that amount for redemption. I would not expect a call back from the lawyer anytime soon. You might have to go over to his office. I know I would.

[tobee43]

well how about just leaving it at home...i'm mean i don't want to be dishonest...ok maybe i do...but really this situation should have been resolved in the form of an objection.

[justbroke]

Too many why's and questions. There is either something really nefarious going on, a misunderstanding, or something completely different. I just don't understand the issue because in New York, only a "wedding ring" is exempt to $5,000. Engagement rings are fair game and the attorney should have known this. Everything that I have read (last year) showed that engagement rings in New York were fair game for the (panel) Trustee.

As an aside, I would never bring any non-exempt property or "partially" exempt property to the 341 Meeting! Never even wear jewelry to a 341 Meeting. This should be a standard handout for any client of a bankruptcy attorney.

I have read about Trustees not only taking rings, watches and other jewelry at the 341 Meeting, but also having debtors write CHECKS out for what was in their account at the time of filing! This is the Trustee's job. I certainly want to here more about this, especially when the 341 Meeting was and how long it has been since the case was dismissed. (I'm shocked that they allowed it, but as Des wrote, if you compensate the (panel) Trustee for the time exhausted in the case, you can get them to agree to dismiss.)

(Also, I think this was the panel Trustee and not the United States Trustee.)