BK Trustee my biggest debt collector ever

[Tony733]

I have been beaten up in court with debt collector lawsuits and judgments and after a scheduled "debtors exam" decided to file Ch 7 before they could seize anything (wow if I only had only known what has happened to me now, then.)

I contacted a local BK attorney who told me my case was an asset BK and more costly to file. So I came up with my last dollar to pay him to file.

What a nightmare this has become. I was told this was going to be a "fresh start" I can see now, I could easily become homeless and unemployed at the same time when this over.

Some of the worst problems

1. I was foreclosed on and lost my home before BK and was forced to move into my business (which was legal within city code) and I have used the homestead exemption to keep my business.

2. I have some vacant lots, which due to zoning problems, are very hard to sell and are non exempt assets.

3. I have had the 341 meeting and my attorney couldn't attend. The BK trustee really gave me the 3rd degree on assets and exemptions.

4. The BK Trustee has filed motion objection to exemptions (all exemptions "in total") without giving any reason or specifics.

5. The Trustee has hired his own law firm to represent himself.

6. My 341 60 day club as been extended to more than 90 days for creditors to file proof of claims.

7. I have no more money to pay my attorney to fight these claims

8. I have now realized that I have signed over my total assets to the trustee through BK filing

So now I truly have nothing.... If this is the "fresh start" everyone talks about I am totally stressed out.

[JackBondLove]

You can't complain about the non-exempt vacant lots. Your attorney not going to the 341 meeting was definitely a no-no - did he at least he give you coaching on how to handle the trustee?

As for the trustee giving you the 3rd degree on assets, that's his job! I was run through the ringer as well. I had put down $39K for the value of my home because I had bought it (literally an hour after I signed the filing documents with my attorney!) for $40K with a $1K reimbursement on closing costs, but my trustee said, "the value is $40K!" But at least he didn't object to my exemptions! (You seem to have gotten a REAL hard-ass!) And he is hiring his own attorney! WOW!

It seems that the main contention here is that the trustee wants to put his paws on the business property, whereas you claim it is your residence now - but that since you have just changed it to being residence, it is not covered by the exemption, and is considered to be an act of hindrance to your creditors. Did your attorney say anything about this?

As for the whole idea of filing BK, it sounds like you have had a major cash flow problem, and you are about to default (or already have.) In that case, had you not filed for BK, your creditors would have gotten a judgement, and you would be broke in any case, so don't think that you would be doing any worse by having filed for BK. Perhaps with careful planning, you could have converted the business property to personal property and kept the exemption.

I'm not sure what assets you have that you think should be exempt, but that the trustee doesn't think so. Can you elucidate? Exemptions are usually pretty cut and dried.

[HHM]

What you describe if fairly standard procedure to some degree for an "asset" chapter 7.

However, for your 1st post on this forum, I am not sure your intention; you have no questions, just lamenting that your case is turning out a particular way that was ENTIRELY predictable. As JackBondLove points out, what you are going through is not as bad as what would have happened had you done nothing.

The game is not over, you can fight the trustee.

What many people fail to realize (and unfortunately many attorneys as well) the trustee is your adversary, they are your enemy in BK, you need to treat them as such, they have absolutely no decision making authority. They take an action, you can object, the judge ultimately decides.

[Tony733]

You can't complain about the non-exempt vacant lots. Your attorney not going to the 341 meeting was definitely a no-no - did he at least he give you coaching on how to handle the trustee? NO

As for the trustee giving you the 3rd degree on assets, that's his job! I was run through the ringer as well. I had put down $39K for the value of my home because I had bought it (literally an hour after I signed the filing documents with my attorney!) for $40K with a $1K reimbursement on closing costs, but my trustee said, "the value is $40K!" But at least he didn't object to my exemptions! (You seem to have gotten a REAL hard-ass!) And he is hiring his own attorney! WOW!

It seems that the main contention here is that the trustee wants to put his paws on the business property, whereas you claim it is your residence now - but that since you have just changed it to being residence, it is not covered by the exemption, and is considered to be an act of hindrance to your creditors. Did your attorney say anything about this? NO

As for the whole idea of filing BK, it sounds like you have had a major cash flow problem, and you are about to default (or already have.) In that case, had you not filed for BK, your creditors would have gotten a judgement, and you would be broke in any case, so don't think that you would be doing any worse by having filed for BK. Perhaps with careful planning, you could have converted the business property to personal property and kept the exemption.

I'm not sure what assets you have that you think should be exempt, but that the trustee doesn't think so. Can you elucidate? Exemptions are usually pretty cut and dried.

I used standard exemptions for cloths, car, tools of the trade, household goods, etc. all within limits. I don't know how the Trustee can file a blanket motion of objection to exemptions "in total" without a basis or justification.

You are right about the trustee going after business property although I owned the property personally and the business/corporation was paying me rent. I was not taking a salary.

[Tony733]

I guess my questions are to the uneducated souls who thought BK was a "fresh start".

Why wouldn't my BK attorney tell me this could happen?

Why woundn't my BK attorney help me prepare for the 341 meeting?

I really think I would have been better off going to the creditors "debtors exam" than the Trustee's "debtors exam" (341) meeting. I guess its too late for a do over now.

[ValleYum]

What exemptions did you use? State or federal?

[Tony733]

What exemptions did you use? State or federal?

WA state - the new exemptions are very generous and I was well within limits on everything. Thats why I don't understand how a motion can be filed with no specifics or reasons.

[mountanddo]

I guess my questions are to the uneducated souls who thought BK was a "fresh start".

Why wouldn't my BK attorney tell me this could happen?

Why woundn't my BK attorney help me prepare for the 341 meeting?

I really think I would have been better off going to the creditors "debtors exam" than the Trustee's "debtors exam" (341) meeting. I guess its too late for a do over now.

Sounds like the first thing you have to do is find the contract you signed with the attorney and see if he breached the contract by not 1. attending the meeting with you. 2. Preparing you for the meeting though it does seem by your post that he let you know you would be an asset case. As I've been told on here before, it is your attorney responsibility to represent you in your bankruptcy, not educate you on the general laws.

Did you have any communication with your attorney before you filed? Did you ask the question...what are you going to do for me for the money I am paying you?

Now is the time to do your research since you obviously can't count on your attorney. You need to figure out a way to get through this.

As far as the uneducated souls who thought bankruptcy was a fresh start? For those that did their research, it is.

[Tony733]

Sounds like the first thing you have to do is find the contract you signed with the attorney and see if he breached the contract by not 1. attending the meeting with you. 2. Preparing you for the meeting though it does seem by your post that he let you know you would be an asset case. As I've been told on here before, it is your attorney responsibility to represent you in your bankruptcy, not educate you on the general laws.

Did you have any communication with your attorney before you filed? Did you ask the question...what are you going to do for me for the money I am paying you? My first impressions were that he was very short with me and my questions (maybe I should have quit with him then) but his last words were. "You have done the hard work, now its our job"

Now is the time to do your research since you obviously can't count on your attorney. You need to figure out a way to get through this.

As far as the uneducated souls who thought bankruptcy was a fresh start? For those that did their research, it is.

I am just here to give warning to those who think BK is easy! and pain free. I have not seen many posting that describe what can go wrong

[justbroke]

There are many postings that describe what happens! Many of the pitfalls do come from pro se filers who don't understand exemptions and how to protect assets. Then, we get a few from attorney-represented debtors. The represented debtors typically were not told everything, it was "glanced" over, or the attorney may have reassured them that ti would "not be a problem" that they had so many assets.

The fact is and will always remain that a Chapter 7 is a liquidation.

You can only hope that you retained a good attorney when you have a lot of assets. If you do have a lot of assets, you should expect to pay $4,000 or more for a Chapter 7. Even if you think that the exemptions may cover you, the Trustee can "object" to the exemptions. This is typical. That means a hearing before the Judge. That is when you -- through your attorney (hopefully) -- force the Trustee to prove that you have no right to the claim of exemption. It happens more often than you think.

I can't believe that the Objection to Claim of Exemptions was filed without "any" reason. The Trustee had to list something. It could be as simple as you are not entitled to use the exemption scheme that you are using! (Did you move recently?)

• You have the opportunity to get rid of lots that you can't sell anyhow. Let the Trustee play with them!
• The Trustee is an attorney and has to earn fees in an asset case. They almost ALWAYS hire themselves. This is their job and that's how they earn money in an asset case. (Many people don't understand that fact.)
• Your 60-day club was NOT extended! What was created was a "claims bar date" for an asset case! This just allows creditors to file claims in case the Estate has money to distribute after liquidation. This is not to be confused with the "dischargeability bar date" which is the last date to file a complaint on dischargeability. (Your discharge WILL come after day 60 so long as the United States Trustee doesn't intervene.)
• Fight what claims? The claims in the asset case? The (panel) Trustee will typically police the claims in a Chapter 7

For me, I can only suggest to stop and relax for a moment. You can ALWAYS convert to Chapter 13 if you want to. You and your attorney need to figure out how you will respond and challenge the objection to your claim of exemptions. This may involve, as mentioned earlier, reviewing your fee agreement with your attorney. In any case, it is not over.

[Tony733]

If you would like the Trustee's motion I would list it here it is very short

Objections to Debtor's Claim of Exemptions

"You and each of you will please take notice that the trustee, pursuant to 11 U.S.C. 522(1) and Rule 4003, objects to the allowance of the debtor's claim of exemptions in their entirety pending further review and information and reserving valuation."

Thats it.

Can this be just a place holder to reserve trustee's rights?

[justbroke]

Can this be just a place holder to reserve trustee's rights?

I don't think the Trustee can get away with just that. There is no "cause" listed in the Objection. You see, the Trustee only has so many days to file such an objection to the exemptions. i think it's 30 days from the date of the 341 Meeting. It reads as though the Trustee is trying to "use" it as a placeholder.

That's actually just silly what was done... just silly! But, sometimes there are silly things done. I can't guess what the Trustee is up to, but I'm just speculating that they are using it as a placeholder since they can't value your property and don't know just what fits in the exemption. More specifically, I don't think the Trustee likes your valuations.

[HHM]

Let's back up here a bit.

An objection to exemptions is just that, it doesn't really need any more reason. An objection to exemptions is only a quasi legal exemption; it really is more of an objection to a fact in the case, not a legal argument; all the trustee has to do is raise the issue. After all, the burden of proof for exemptions lies with the debtor. Vague objections from trustees is STANDARD practice, these are not legal briefs. Now, if Tony733 is to be believed, this objection may be a little too vauge, at the very least, the trustee should be specific which exemptions (specifically) he is objecting, but the objection need be no more detailed than

"Trustee objects to claim of exemption on Debtors schedule A for XYZ real estate."

There is no more explanation that is required, the objection is simply the trustee stating his belief that the asset is either not exempt (because it doesn't fall within the category of exemption claimed) or the value of the asset (the asset is worth more than the debtor stated and therefore a portion of the equity is non-exempt).

As for the 341 meeting...even if your attorney was there, the same thing would have happened. the 341 meeting exists so the trustee (and other creditors) can ask you questions (any questions). There is NOTHING for your attorney to do. Also, the 341 meeting is, technically, a pro bono service of your attorney, the way bankruptcy attorney fees are structured, you don't (can't) actually pay for it. Although it is not good customer service, there is no inherent requirement that YOUR attorney attend the 341, only that AN attorney attend the 341.

[mountanddo]

So the trustee is then considered "the" attorney?

[justbroke]

"Trustee objects to claim of exemption on Debtors schedule A for XYZ real estate."

I agree that it should at least enumerate the property itself. In my District, there is always the specificity of the property and nothing so "generic" as listed in the above post -- if that's the actual objection.

In my district it typically looks like this... (with some even more detailed)...

The Trustee, JOHN DOE, by and through the undersigned counsel, pursuant to Rule 4003(b) of the FRBP, hereby objects to the claim of exempt property consisting of;

Property listed on Amendment to Schedule C filed by the Debtors for the following reason;

1. The Trustee objects to the claim of 123 ANY STREET, SOMEPLACE, SOMEWHERE as exempt since the Debtors concealed said asset and are now amending their claim of exemption.

Perhaps the burden in the objection is different amongst the Districts? Probably so.