Can trustee require current financials - 18 months post discharge (Chap 7)

[despritfreya]

Des: one last question and I'll stop bugging you. If you were to recommend a time to file the Motion to Compel Abandonment, when would that be? I'm assuming the Trustee would have to file something to compel us to turn over the documents? Would you file then... or be proactive and file now? ... or wait until he has communicated something to our attorney? or... would you tip your hand slightly and make the real estate agent aware that we may do this?

1. You are not "bugging me". This issue is pissing me off so, if anything I say helps, more power to you.

2. I would be first contacting the Trustee to get his spin on this issue. If I recall correctly, your only recent contact has been with the realtor. If the Trustee wants to go down this path I would want to know "what's in it for my client"? If I did not get a comprehensive answer that made sense and benefitted my client I would give the Trustee the opportunity to end the matter before I filed an Application to Abandon - I would give the Trustee 10 days to file a notice of no distribution. If that was not forthcoming I would then file the Abandonment.

And, yes, this is a matter I would bring to the attention of the UST - assuming the UST and the Trustee are not "in bed with each other".

Des.

[freeatlast09]

Thanks Des.

We didn't hear back from our attorney today so we'll try again tomorrow. I'll post any updates for anyone following this thread. Thanks.

[keepsmiling]

Hey free, wishing you good luck with this! Scary what this guy may be getting away with. Just wondering, do you want your house back?

[freeatlast09]

Just wondering, do you want your house back?

keepsmiling: We don't want the house back. We left (moved to a different city) almost 2 years ago. We're not objecting to the short sale. We're only objecting to the invasion of our privacy by BofA requiring post discharge tax returns, bank statements, pay stubs, hardship letter etc...

All those documents may be required for a non-discharged short sale to prove you can't pay for the house, but in our case the mortgage has been discharged so those documents are irrelevant. The real estate agent claims that she understands this, but it's just a 'silly' requirement by BofA so we should just play along. She also likes to keep stating "Well, you're obligated to help with the sale." We may be obligated to cooperate with the Trustee for the sale of any property which will benefit the bankruptcy estate, but in this case the estate gets nothing & we get nothing (except our privacy invaded). The only winners in this are the real estate agent (her commission) and BofA since they wouldn't have to go through with a lengthy and expensive foreclosure.

We're trying again to contact our attorney so he in turn can get some answers from the Trustee.

We'll keep updating for those interested in the outcome.

[chicagoannie]

That real estate agent has got stones, saying you are obligated to assist with the sale, considering you did not employ her!

Very interesting situation. I am interested in how this pans out.

[keepsmiling]

Annie, you just took the words right out of my mouth... was coming back to talk about how BIG those stones are lol.... I understand that OP is (or SHOULD BE) under no obligation and am very curious to see how this all turns out. We have a very questionable amount of equity and could conceivably find ourselves in a similar situation if we had a player type trustee... may I ask what state the home is in?

Just never know what a judge might say about cooperation... dh was FORCED by a judge to continue working for a non paying client (it was NOT a pro bono case)... partly why we ended up in the situation we are in. So freeatlas, you do have a very captive audience here. Hope these colluders get what's coming to them-- all sounds way too fishy-- PLEASE keep us posted and hope you can get something out of this aggravation!

[freeatlast09]

o.k. - latest updates. Multiple calls to our attorney - no return phone call.

Real estate agent emails again - "need those docs". We reply that we haven't talked to our attorney yet, but we inquire as to how this is beneficial to the bankruptcy estate. To our surprise the response was: It brings $15,000 for the estate. Huh????? We inquire as to how a short sale is providing money for the estate. Answer: the Trustee has charged a $15k fee to the buyers which will be distributed to creditors after his commission. WOW!

Now that is some tricky stuff since we exempted $20k as a homestead exemption. (This was as a precaution - not that we thought we'd get anything from it.)

So it seems this is a bypass of our claimed exemption?? All of this seems a little on the unethical side to us. What stops every trustee from taking every house and selling it short and then charging a 'buying fee' thus bypassing exemptions?

Of course, still unanswered is why we would have to provide financial documentation for this. The Trustee has the authority to list the house, negotiate a price and cut a side deal with the buyers, but can't complete the transaction because BofA wants an irrelevant look into our lives post-discharge????

Sorry so long tonight - very angry here!

Will post more as it happens.

[chicagoannie]

That just simply cannot be legal. And didn't you say this trustee has kicked like 80 of these short sales to this same real estate agent (who has to be making some kind of money on whatever she sells.) I wonder if there is any way to "follow the money" and see if these $15K kickbacks actually have been going to creditors or lining your trustee's pockets!!!

[justbroke]

Real estate agent emails again - "need those docs". We reply that we haven't talked to our attorney yet, but we inquire as to how this is beneficial to the bankruptcy estate. To our surprise the response was: It brings $15,000 for the estate. Huh????? We inquire as to how a short sale is providing money for the estate. Answer: the Trustee has charged a $15k fee to the buyers which will be distributed to creditors after his commission. WOW!

Now that is some tricky stuff since we exempted $20k as a homestead exemption. (This was as a precaution - not that we thought we'd get anything from it.)

When it looks like a pig, smells like a pig, and walks like a pig... it's a pig. There is something REALLY wrong here. If you have a $20K exemption applied, then the Trustee would need to give you the proceeds after his commission, up to that $20K.

You really need to talk to the attorney. I'd make 3 calls a day. The worse that could happen is the Trustee files a Motion to Compel but your attorney should probably already be drafting a Motion to Compel Abandonment himself. This is quite ridiculous.

[freeatlast09]

I'd make 3 calls a day.

Oh yeah.. he's on speed dial tomorrow.

This is quite ridiculous.

I've called it a few other things since this all started. ;)

[despritfreya]

I'm not even putting in the quote for this comment:

WOW. This is crap and you need to print out each and every response on this thread, give it to the Trustee, the UST (his boss) and your attorney.

The Trustee, by his wheeling and dealing, has conned the buyer into paying a kickback - let’s call it what it is. That, while it shows the Trustee's greed since he will make a mint off of the total sales price, is not the issue. And, in my opinion - although I have not researched this - neither is the homestead exemption since the Trustee has created “fake” equity.

If he wants to cut a deal and finds someone stupid enough to fall for it, that is his prerogative. What he does not have the right to do is force you to help him in this endeavor. He has full control of the asset. It is HIS responsibility to administer it. It is not your responsibility to assist him beyond what the Code requires. The Code DOES NOT require you to provide post petition financials. He cannot (or should not be allowed to) demand anything of you that is not required by the Code. Your time is valuable. If he wants you to do HIS job then HE needs to compensate you.

I once handled a case where the Trustee conjured up something similar by cutting a deal with the 2nd lien holder to give the estate back some $$. This Trustee was going to force the sale of the pro se debtor’s home even if there was no equity (sound familiar?). The debtor did not want to lose the home, hired us and converted the case to a 13. Eventually the debtor lost the home due to the inability to keep the 1st mortgage current but I had the satisfaction of knowing the 7 Trustee ran up his legal fees and got nothing in return - I truly HATE greedy people. While my client eventually lost the home (he/she was not too unhappy since he/she got to live there for many months without paying the mortgage) the fact that the Trustee lost big time put a smile on my face. I’ll bet that Trustee won’t try that again.

I can tell you that we wanted to litigate the issue in the context of the 7 but the client was too frightened about losing the home. Can you imagine the ramifications? What is to stop a Chapter 7 Trustee from colluding with all secured lenders to sell otherwise valueless property out from under the debtor, leaving the debtor with nothing. If this is allowed no debtor who files a Chapter 7 can feel safe that he/she will keep his/her fully encumbered property.

Des.

[justbroke]

Des is a very passionate attorney. I like it when he gets this way!

[freeatlast09]

The Code DOES NOT require you to provide post petition financials. He cannot (or should not be allowed to) demand anything of you that is not required by the Code. Your time is valuable. If he wants you to do HIS job then HE needs to compensate you.

Yes - that is the HUGE question we've been trying to get answered. The fact that he is wheeling and dealing is not right, but not the most objectionable part of this. Blocking the short sale is not our objective. Truth be told, I'd like to see the house enjoyed by a new family, but we don't want to assist in this process and feel that we have a right to post-petition privacy.

Des is a very passionate attorney. I like it when he gets this way!

I couldn't agree more.

Des - I thank you for your information and passion!

[chicagoannie]

Yep....everything that Des said. Except keep in mind, the Trustee has not personally demanded the post-discharge financials and "cooperation with the short sale"....methinks this trustee is in cahoots with the real estate agent and is using HER as his mouthpiece.

[freeatlast09]

methinks this trustee is in cahoots with the real estate agent and is using HER as his mouthpiece.

That is our thinking as well. Though, today she claimed that the Trustee would be sending a letter to our attorney outlining why we need to turn over the documents. We'll see...