Had 341 today - Freaking out

[jenbow]

The long awaited 341 hearing was today... one of our creditors showed up. Well, he is not even a creditor he his a home owner of a job that my husband company had to walk off of because we shut down. This homeowner owes us like $70,000 and is one of the reasons we had to shut down. Terrible situation..

Anyway, the homeowner asked us a bunch of questions.. like what did you do with the checks he has written to us, do we realize how much we have hurt him, what are our plans to fix this.. and so on. My attorney finally brought up that this was not relevant and that this needed to be taken to the Registrar of Contractors. The trustee asked him to sit down.

THen the trustee asked us one question on the tools of the trade exemption.. he asked if we also depretiated all of the tools on our business taxes. My attorney said we would get back with him in 10 days.

So my fear is that the stupid homeowner put some question marks in the trustee head and that is why he did not ask us anything else. Out attorney said he was suprised that the trustee had nothing else to ask..

Anyway, what is the timeline for the trustee to ask us more questions.. is it like 10 days? I am waiting for someone to ask us about our business expenses, profit and loss, etc.. can this really be almost over?? When can one start to breath?

Thanks all
Jen

[mommi2many]

jen--sorry to hear about the homeowner showing up. That must have been an awkward moment for you. Here's to wishing for a smooth ending to all of this.

[frogger]

You pay your attorney to worry, so let them do it for you. As your attorney stated, he will get back with the trustee within 10 days, so they should work everything out if necessary.

[despritfreya]

Your attorney's comment to the customer about contacting the ROC is correct. The customer has a potential claim against your bond or the recovery fund. Make sure you list the ROC as a potential creditor on Schedule F. If you did not, amend Schedule F.

As to the Trustee's inquiry, he has as much time as he needs to investigate your business dealings and your schedules. If he believes your dealings are complicated he will hire an attorney who will send you a letter asking for additional information. This is nothing to be concerned over. It is normal operating procedure and does take time. It should not delay the entry of your Discharge.

Des.

[tcreegan]

Hi jenbow,

asked us one question on the tools of the trade exemption.. he asked if we also depretiated all of the tools on our business taxes

This sounds like a question I would expect from a tax CPA, can't see in the foggiest what the homeowner rant would have to do with it....

Happy Thanksgiving!

Tom in Colo

[btbeme]

Any update?

When your attorney says that he was surprised to not hear many questions from the Trustee, that is typically a good sign. A Trustee's primary job is to guarantee the veracity of the BK process and make sure that all the laws and guidelines are followed. Since a Trustee can be from almost any background, they each have their own "hotspots" or specialty items that they might have a better feel for than another Trustee from a different background. I can tell you that many Trustees in many areas are starting to look closely at the Tools of the Trade exemptions, as that is an area that has been widely abused (in their eyes). For example, I know that a local Phoenix trustee sent a memo to all the attorneys on his docket telling them that computers will not be allowed as Tools of the Trade unless they meet some very strict guidelines.

While that may be an admirable position to take considering the abuse this area has taken, it likely will not hold a lot of weight once someone litigates the issue, as a computer has very little value (in almost every case). Filing it as an exemption under Tools of the Trade might cause that Trustee some heartburn, but claiming it under other exemptions would likely fly - and the end result is the same, ergo, why the fight?

Bottom line - if you were honest in your filing, claimed and listed what you actually owned, have a reasonable and verifiable value for what you listed, then it would be difficult for a Trustee to take issue with it. If you were honest about the income you received (were the checks he wrote you included in your income, if the timeline required it?) and did your homework, I would not worry about this. Depreciation is kind of a backwards type of income, which, if take on 2010 taxes, might be partially retrievable as income. It would likely have to be a significant amount to make it worthwhile, however.

Also - a single creditor would receive very little from the court should the Trustee actually pin something on you. If you had, say, 15 creditors and ended up having to pay, say, $2000 because the Trustee found a big error, each creditor would generally get about 1/15th of that $2000 - but the Trustee would get paid first, so the $2000 would be closer to $1800 divided 15 ways.

I'd love to hear who your Trustee and attorney are - don't post them here, just Private Message me if you feel like sharing.

[jenbow]

Thank you btbeme. I just sent you a pm with attorney and trustee. n