Meansno, Discharged, Closed...NOW UST Audit

[Wantmypeace]

This is just crazy! I really hope it all works out for you. I'm very surprised your attorney hasn't called you back yet. I'm also curious if he/she will expect you to pay more to deal with this issue when he/she received notice about it months ago and told you not to worry about it. PLEASE keep us updated on how this goes, and I will pray that it is all a goof-up!

[drowningNIL]

hello...another day, no return call. my husband called the attorney's office again today early in the afternoon and was told "He (attnorney) is out to lunch"..... they took a message. We just faxed OUR cc of the letter over to their office since we haven't even been able to find out if the attorney received his letter. He has always been hard to get a hold of but we are on a time line here PLUS it would be GREAT to find out that this is all just some clerical error and we are in fact DONE with this

[justbroke]

If you are close to his office... go sit there tomorrow. Also, keep calling every hour until they return your call. Attorneys are busy and can easily get distracted.

[drowningNIL]

If you are close to his office... go sit there tomorrow. Also, keep calling every hour until they return your call. Attorneys are busy and can easily get distracted.

LOL -My husband and I talked about doing just that - but unfortunately he is not very close and we both have commitments that take us through the weekend so we just can't do it. Grrrrrr another day. But at least our anxiety is getting numbed up a bit haha with this delay. We are getting our ducks in a row and we're ready if the paperwork is needed.

[drowningNIL]

evening, all.....ok heard from the attorney. It was a random audit and does need to be completed. Nobody knows why we were closed etc. with the audit incomplete. So we have our paperwork ready whenever it's time. We didn't commit fraud, but i'm still worried about how some things can be construed. Way back in March and April we did a few things that I m sure don't look so great now that we are sitting here with BK...but we did not even have BK in mind back then at all - not even a glimmer of thought of it. We knew in the coming years we'd have a recovery and be able to settle our debts. Got sued sooner than we ever thought would happen and filed in September. So some March/April bank statements have me a little squirmy. Just have to wait and see I guess.

[mommi2many]

Whew! Glad to hear that drowning. Things are looking up from here on out.

[backtoschool]

I do not think your discharge is in jeopardy. Your case was prematurely closed, but that is not a big deal. This is a random audit and will not be as bad as if the US Trustee was looking for something specific to push you into a Chapter 13. The worse case scenario in my opinion is that they will find a loan or payment in your records that they see as a preference and you will become an asset case. Even this probably won't happen. In any case, I believe your discharge will hold up and that is what really matters.

[drowningNIL]

thanks everyone. it was a random audit by an outside firm but now it will be completed by ust office since our attorney didn't comply.

i had the mega-mother of all panic attacks yesterday and i am nervous enough I am going to confess what i am worried about so I can get feedback. no judgements please... i am embarrassed but very early - about 5 mo prior to filing we deposited money from custodial accts into our checking acct. (with intent to pay it back asap as it was our kids' education funds) we needed the money for day to day expenses and for starting a new business that did take a loss in 2010 but will be profitable in the next few years. So it's these deposits I am really worried sick about. They want explanations of anything over $500. These totaled about 10K - I believe those accounts were exempt as they were not really ours. Our son took his money out (it was deposited and then withdrawn in various increments as he needed/wanted it) But then the other $7K remained and dwindled. No money had been deposited into those accts for over a year before we withdrew it ...so its not like we were putting money in the kids accts to hide it. We had no money lol. this whole thing revisited is just making me sick.

I go back and forth between feeling like we are in the clear and then losing sleep (last night) thinking we are screwed.

[backtoschool]

thanks everyone. it was a random audit by an outside firm but now it will be completed by ust office since our attorney didn't comply.

i had the mega-mother of all panic attacks yesterday and i am nervous enough I am going to confess what i am worried about so I can get feedback. no judgements please... i am embarrassed but very early - about 5 mo prior to filing we deposited money from custodial accts into our checking acct. (with intent to pay it back asap as it was our kids' education funds) we needed the money for day to day expenses and for starting a new business that did take a loss in 2010 but will be profitable in the next few years. So it's these deposits I am really worried sick about. They want explanations of anything over $500. These totaled about 10K - I believe those accounts were exempt as they were not really ours. Our son took his money out (it was deposited and then withdrawn in various increments as he needed/wanted it) But then the other $7K remained and dwindled. No money had been deposited into those accts for over a year before we withdrew it ...so its not like we were putting money in the kids accts to hide it. We had no money lol. this whole thing revisited is just making me sick.

I go back and forth between feeling like we are in the clear and then losing sleep (last night) thinking we are screwed.

Most likely these deposits will be seen as fraudulent conveyances if you put the money in the accounts up to two years before filing, and/or if you paid any of the money back. The money also might be considered income if you are not going to declare it as a loan. It is hard for you to declare it as a loan since you are the custodian on the account, but it might be doable. A lawyer will have to chime in on that.

I think this could possibly turn you into an asset case, but would not be fraud and would not affect your discharge.

[drowningNIL]

thanks for the reply bts. no money was put in by us 2 years prior. I am thinking this is a new can of worms that will be dug up and they'll want all the info on those accounts and this will go on longer.

if we had even known these would be a factor we would have waited to file another 3 weeks and been in the clear of the 6 mo look back.

so if we are turned into an asset case, what will that mean for us? the attney didn't seem concerned, but he doesn't ever lol

[backtoschool]

You have your discharge. They will only revoke it if they find provable fraud which they won't. The audit will reopen your case but this will not affect your discharge unless fraud is found.

As to becoming an asset case, it will mean that the money you took out of the custodial accounts will be seen as an cash asset and the trustee will expect you to come up with a payment schedule to pay it to the estate and then the trustee will pay it to your creditors. It will keep your account open for awhile but not affect your discharge.

That is the worst case scenario I see happening here. The other scenario, is that those transfers might be seen as income and hopefully that will not affect your income enough to make you a chapter 13 candidate.

[drowningNIL]

thanks bts.

why would th3 money be a cash asset if it came from exempt accounts? it wasn't theirs to take from the start. we want to pay that back to the kids vs the creditors who would have had not hand on it anyway.

i do not want to end up a 13. the thought of that makes me ill and i feel panicky again. the 13 trustee in these parts is vicious. i guess i would have never thought of one time transfers as "income" to base anything off of. the accounts are drained so no more available. and back then we were desperate enough to do something probably immoral as taking our kids' money. those were bad times and now that 2011 was looking up the possibility of a 13 is nauseating.

[rhuff1]

You have your discharge. They will only revoke it if they find provable fraud which they won't. The audit will reopen your case but this will not affect your discharge unless fraud is found.

As to becoming an asset case, it will mean that the money you took out of the custodial accounts will be seen as an cash asset and the trustee will expect you to come up with a payment schedule to pay it to the estate and then the trustee will pay it to your creditors. It will keep your account open for awhile but not affect your discharge.

That is the worst case scenario I see happening here. The other scenario, is that those transfers might be seen as income and hopefully that will not affect your income enough to make you a chapter 13 candidate.

Backtoschool, glad to see your posts today. It's been a few weeks. The board missed you!

[debee]

Backtoschool, glad to see your posts today. It's been a few weeks. The board missed you!

I'll second that. Welcome home, b2s.

[backtoschool]

thanks bts.

why would th3 money be a cash asset if it came from exempt accounts? it wasn't theirs to take from the start. we want to pay that back to the kids vs the creditors who would have had not hand on it anyway.

i do not want to end up a 13. the thought of that makes me ill and i feel panicky again. the 13 trustee in these parts is vicious. i guess i would have never thought of one time transfers as "income" to base anything off of. the accounts are drained so no more available. and back then we were desperate enough to do something probably immoral as taking our kids' money. those were bad times and now that 2011 was looking up the possibility of a 13 is nauseating.

When you move money from a non exempt account, to an exempt account it becomes an asset unless you exempt it on your petition as an exempt cash asset. I am assuming the money was transferred from the custodial account to your checking account. That money is now non exempt. If you used it to pay for bills, etc before you filed, that is fine, and the cash will not be an asset, but the transfer of the money from the custodial account to your account will have to be accounted for. Was it a loan? (It will be hard to say yes to this since you are the custodian of the other account) Was it a gift? (again hard to say yes to this since you are the custodian of the account). Was it income? The US trustee will probably say "yes". This will change your means test.

If you paid ANY of the money back into the kids account over $600 in a year ,that will be a fraudulent conveyance and will be an asset. I paid two $500 checks to my mother to help her with expenses, and that made me an asset case.

Don't panic. None of this will affect your discharge most likely, unless you were really close on the means test. And all of this can be negotiated with the trustee.