How involved does the trustee get

[mcordry]

I was just wondering how involved the trustee gets into your finances. Do they check to make sure all the math is correct such as if you have deposited more into your checking account than your check stubs say. Please don't think I am trying to do anything against the law... I was just wondering. I have a business and my attorney said it should be able to keep it because it is a hair salon and very little inventory. Does the trustee come into the business and look at your computer information or do they just go by what your profit and loss statements say. Again just curious, about how indepth they go. My attorney said that they have no interest in taking over your business, because they don't get paid alot of money, they just want to make sure that you don't have anything they can sell. Please, please , please don't think I am trying to get anything over on the trustee, I plan to be as honest and up front about everything as possible.

[LadyInTheRed]

Listen to your attorney. The trustee is looking for understated income to make sure you really qualify for a Chap 7 discharge and for non-exempt assets that can be easily liquidated.

I have never heard of a trustee going to anybody's business. There is one trustee in one district in Florida who is known for sending appraisers to people's homes to value their tangible property. But, other than in the one district, that is unusual.

The trustee will probably ask for detailed information on business assets and business receipts and expenses. If he looks at your bank statements, it will be for evidence of income or assets you haven't reported. So, if there are large deposits that are not supported by the income you report in your petition, he will ask you about them. If there are large withdrawals of cash right before you filed BK, he may ask what you spent the money on to make sure you didn't give it away to a family member or hide it under your mattress to keep it away from creditors. As a business owner, you should expect to answer some questions about your business. Since you plan to be honest, the questions will be easy to answer.

If you are honest in your petition and do not try to hide any income or assets, there is nothing to worry about.

[mcordry]

bump

[justbroke]

bump? For what purpose? LadyInTheRed just provided a good summary based on her experience in the process. I can tell you that mine was no different.

If the paperwork appears to be complete, then the inquiry stops there. If you omitted information or it is confusing, the inquiry could go deeper. Your case could be selected for random audit, but you'd know that within days of filing.

[LadyInTheRed]

ummmm, your post was already at the top of the Chap 7 forum. Bumping it isn't going to get responses any quicker. The board is not very busy lately and you shouldn't expect a lot to happen in just over 2 hours. Only 7 threads have had activity today. Things probably won't speed up over the weekend because weekends are generally pretty slow. You'll need to be patient.

[LadyInTheRed]

LOL, justbroke. We were typing at the same time. I guess bumping did get a little attention, but not exactly what mcordy was looking for.

[justbroke]

I looked at the thread earlier but was not going to respond. As we both know, cases are so fact specific and we can't tell what the Trustee will do when they have a particular case before them. As you wrote, so long as you're honest, the chips will fall where they may. I also wrote because I'm not expecting that many will respond to this thread because it's more about accuracy of the forms and other submitted information and that's not a common discussion.

As you wrote, just heed your attorney's recommendations and await the outcome. A Trustee can request more documentation at any time they seem fit. (And, in most cases, it's not the actual Trustee but one of the Trustee's staff attorneys or staff members that reviews your documentation. Please don't ask me what a "trigger" may be, but they have triggers that they look for to suggest that they need to inquire further.)

[frogger]

bump? For what purpose? LadyInTheRed just provided a good summary based on her experience in the process. I can tell you that mine was no different.

If the paperwork appears to be complete, then the inquiry stops there. If you omitted information or it is confusing, the inquiry could go deeper. Your case could be selected for random audit, but you'd know that within days of filing.

Great answer JB, just as LITR gave a great answer. To the OP............... patience grasshopper. You already have good advice.