When do small assets = no asset case? (Arizona)

[gregemm]

Have my 341 meeting coming up soon and am a little curious what others have experienced as far as distribution of assets vs no asset cases. Have no real nonexempt physical assets that can be liquidated, only thing concerning me is that when I filed my bank account was frozen, so I had no choice but to file with $800 in a joint account. Now, since filing, I have been working a few short weeks (half-time) so some of what I held aside had to be used to keep food on the table and lights on..

In a non-asset case, they will still want the nonexempt bank account funds, right? Or if it's small enough, will they abandon it? Will they convert it to an asset case? I can see with for example the chair I bought for $10 at a yard sale, they are going to ignore it. But with bank accounts it is a bit different, there really isnt much expense in collecting the money and distributing.. What has your experience been?

Thanks all..
- Greg

[despritfreya]

This will depend upon the Trustee. Your bank account exemption is $150.00 ($300.00 if you are married). The Trustee has the right to demand turnover of any amount that was sitting in the account in excess of the exemption.

Assuming you are not married, you are dealing with a $650.00 problem. I agree that such an amount is not really worth the bother but some Trustees will try to nickle and dime you by demanding $$ in excess of the $650 to cover any other piddly non-exempt assets you may have. There is just no way to tell but you should be able to get a better handle on this when you go to the 341. The advantage you have is that you already understand the issue therefore you will not be surprised if it is brought up.

If a demand is made for the $$ and you do not have $650 (plus whatever else he/she wants) just lying around, you can work out a payment schedule with your Trustee - usually over a short window of time - say 6 months.

Is the money still frozen and why was it frozen to begin with. . . possibly a bank garnishment by a judgment creditor????

Des.

[gregemm]

Thanks - will just have to see how it goes! If they were going to ask for it, would it have to come up at the meeting, or could it be later? I am fully expecting them to want something. There's no real work to taking and distributing cash. Just haven't seen anyone that had a relatively small amount of money but really nothing else - whether they execrise that right to demand it or if theres an amount not worth the time..

Yes, the majority of it was from a judgment (Short version, planned on paying them, even before judgment. Tried garnishing pay, they couldnt find my office to serve papers - even though we've got a huge sign out front. So they hit my bank account) A very small portion of it was a state income tax levy. The two of them came in almost exactly a week apart. State one froze 100% of the account (Which, after bank fees they got a whole $3.76) and the other hit the day my paycheck went in and left me $150 - to live on for over two weeks, one of which I was going to be working out-of-state and have to pay upfront for some reimbursed expenses.. The majority of the funds were released back to me within 48 hours of them being notified. (The $3.76, however, was sent to the state the day after I filed.)

[btbeme]

Perhaps the only satisfaction you might get would be the Trustee putting up a fight and forcing the garnishments to come back. Imagine the indignity of the state having to cough up $3.76 for the Trustee.

Des would certainly know better than I, but I would venture a wild guess that the pugilistics required to unravel this and actually recover anything worthwhile would be beyond the Trustee's best use of time. But, it depends on the Trustee. I think that a Trustee would (maybe I should say "should") come to the conclusion that the assets in the account on the day of filing really were not in your control, and while that may not set a legal precedence, I'd say that it would be hard to argue that the cash was "yours" and therefore subject to seizure. Certainly, if it had been in your control, I'd imagine that there would have been $700 of mac-n-cheese in your cupboard - which is perfectly allowable in AZ - the day before you filed. And maybe that is your best explanation at your 341. Begging for mercy generally does not work, but I have seen more than one Trustee enjoy a good story.

Will be interested to hear what happens. I'd place the odds at 80% that you will be "no assets"...but I have been wrong before. Fingers crossed. Worst case is the Trustee will grind YOU to come up with the cash, since it is probably easier than trying to pry a dime out of anyone else.

[gregemm]

Well - it went smoothly. A lot easier than I expected, didn't even ask me anything besides the standard questions. I was amazed that out of 5 scheduled cases in the group I was with, there was a no-show and three that didnt bring their social security cards. He even commented about how easy it is when you do what you're supposed to...

The state would have loved that. They actually did release it once before, they had been sending paperwork who knows where so I never even knew to dispute it with them until they froze part of my account. (It was tax from a state I lived in until 2006, in 2009 they figured something was miscalculated, and it was apparently in collections since.. But I've moved 3 times since then)

That is a very good point about the funds not being in my control, I had considered that and wasn't really sure how to bring something like that up. Because yes, had the funds been available to me I certainly would have made sure I was stocked with food (Since the night that it got frozen really was the grocery night) and I would have been sure to pay towards my electric (I am on the prepaid; so while they did have to stop collecting my past due, I still have to either reload or it goes off) I had done a lot of research before filing, and surely would have been better prepared if it hadn't been an emergency filing. And when I listed the account balances I went by what the statement would show on the date. Figured it would look real suspicious, seeing that the statement doesn't adjust for what was held. And technically it was still in my account, even though I couldn't touch it. I's rather it cost me more than look like fraud. So seeing how he hadn't even asked about it, didnt say I would be surrendering it, guess it is time to wait and see. I kind of wanted to ask him about it, but wasn't sure if that was OK to do.

I will post back when I find out what happens!

Thanks again!!

[gregemm]

So it has been over two weeks and haven't heard anything yet - is it safe to assume no news is good news? The only activity has been regarding a vehicle reaffirmation..

[justbroke]

No news is almost always good news in bankruptcy! Nobody complaining (filing motions, objections, etc) is always a good thing!

[gregemm]

About 15 minutes ago I got the email notification that the trustee filed his Report of No Distribution for my case! So it seems like he wasn't too interested in the relatively small amount of non exempt amounts I had in the bank.

I was really surprised to get it on a Saturday, too.

[ValleYum]

Congrats gregemm! Welcome to the 60 Day Club!!

[gregemm]

Thanks! It's funny how fast it goes. I had been considering filing for so long. Was finally relieved when I did, and time has been flying past ever since. I am almost halfway through my 60! All I am waiting for now is the court to set a date for my reaffirmation hearing. (Have a vehicle that is on good shape, have a little equity in, and only a year left of reasonable payments..)

Thanks again!

[gregemm]

Well, this afternoon I got the email I was waiting for, and am discharged! (It was so nice to not have to check PACER or the mailbox for all of this!) Never one question about any of my concerns.
So, now I think the only remaining question I have is about the old tax that kind of kicked off my having to file. Seems to meet all the requirements to be discharged, was from the 2006 tax year, filed on-time in 2007; when they reviewed it in either 2009 or 2010 they figured that it was off by $160. My ex took all the tax paperwork from that time and they never actually showed me what was filed vs what they adjusted, so not 100% certain what the difference was from, but am assuming it is something to do with living in the state only part of that year.. Anyway, they show the "original bill date" for the assessment as 1/21/10. So, I see it as well past the required time from the due date, filing date and assessment date. I was thinking to be safe, send them a request that they confirm it either was discharged or a statement as to why it was not. Good or bad idea? I just don't want to assume it went away then have my bank account hit again in a month costing me nearly as much in bank fees as the amount they are seeking

[tobee43]

if you had an atty handle your case i would reach out there first. if there were any questions they should most likely be able to give you an idea of what is going on. if the trustee feels there are assets then your case will not be closed until those issues have been addressed.

while you have rec'd your order of discharge, you are still awaiting the order of "close". it may be that particular situation holding up the motion to have been signed for the closing of your bk. or, it may be as simple as they haven't gotten to it as yet.

it's most likely going to be just fine. and, remember there is NOTHING that can't be fixed.

oh! and just a suggestion..open another bank account. if you want to keep that one open just make certain the bare min is in there.

best of luck!

[despritfreya]

So, now I think the only remaining question I have is about the old tax. . . Seems to meet all the requirements to be discharged. . . I was thinking to be safe, send them a request that they confirm it either was discharged or a statement as to why it was not. Good or bad idea?

I find the IRS to be very up front as to whether or not taxes were discharged. There is nothing wrong with you calling and asking.

You can try Special Procedures at 602-636-9302 (Lynda is the person associated with this number) or you can try the insolvency section out of Philadelphia at 1-800-973-0424. I would try the local number first.

Des.

[gregemm]

Thanks - IRS has been great with me so far - unfortunately this is a New York State income tax; from the last year I partially lived there. I have tried to call, but with the time difference and my work schedule it has been near impossible to get anyone on the phone, let anlone someone woth answers. I do have a login for their online tax filing so sent a message throug there related to the notice, and will mail them somethign as well.

May just, at least for now, just a different account for paychecks until we straighten it out. My wife still has an account in her maiden name that has never been used for anything with my name and has never been associated with our address that should be really safe from them. All else fails, Ireally don't mind paying it. Just needed to know if it is up to them to show why it is not dischargeable, or if I should have to show them it is, or best of all that when they get the final discharge paperwork they would automatically take care of it.