My 341 was today, US Trustee sent letter

[playdrums]

Today was my 341. It was uneventful - stock questions and over. No continuance. However, the night before, precisely at 5PM, my attorney received a fax from US Trustee asking me for a bunch of stuff:

Tax returns, W2's, 1099's, checking & brokerage accounts, child support, child custody order, auto and insurance, proof of mandatory deductions from payroll, cell phone, internet, child care, medical, transpo, etc. My kid lives with me part of the time. I'm really worried about it all and wondering if anyone else has had a similar experience. There was no US Trustee actually in attendance at the 341 - just the letter requesting all the details.

I'm in CA and I'm over the median but they want proof that I pass the means test. Also, some of my creditors are family law attorneys - it was hard not to wonder if the 11th hour letter was someone was calling in a favor to keep my feet to the fire! It's a pretty short window to produce as well.

What should I expect from this process?

[justbroke]

Well, first, domestic support orders (DSOs) are non-dischargeable, so interfering with your discharge would not solve anything for someone with DSOs. I would tend to think that a person that has a DSO against a would-be debtor would be glad taht all of the dischargeable items are gone and the debtor could concentrate on paying the DOS. But that's neither here nor there.

As for your issue, it's quite simply that you are over-the-median. You probably have some questionable expenses (did you claim more than $100 for internet, phone, and cellular?). If you have 1099 income, that is definitely an area the UST would want to probe through tax returns, 1099s and bank statements. The UST would also be interested to know if the items you are claiming as expenses, such as the DSOs like medical insurance if you're the non-custodial parent, are required by court order (such as a final decree in divorce and/or child custody order).

Basically, if you're single (even divorced), claiming a lot of domestic-related expenses, and you are over-the-median, expect a good thorough inquiry into your expenses.

If you comply with the request (more like a demand) and your expenses are supported by the documentation (and court orders for DSOs), then you should be fine. If you were borderline and you or your attorney threw in a few extra expenses that may not work, you could find yourself defending the expenses.

[RB3]

testing...

[playdrums]

I wanted to follow up with this even though it has been a while. In response to the request for the materials I mentioned, I did make a great effort to pull everything they wanted. In the meantime I received a letter indicating that my matter was continued to Sep 11, 2014 - so another hearing. We submitted everything to the US Trustee on time. The week of the hearing I contacted my attorney to inquire what I might need at the hearing, what the focus would be, what questions I should prepare for - and if US Trustee would be present. He indicated that he would call the US Trustee and find out anything we needed to know. No response from UST.

At 6PM the evening before the hearing the US Trustee contacted my attorney to let me know they'd been satisfied and that I did not need to attend the hearing. That was a huge relief.

In the end, I think one of the major areas of concern for the US Trustee was my mandatory deductions from my paycheck. While I make well over the median, my spendable income is greatly reduced by child support (post-tax) and mandatory retirement (pre-tax). That's $1500 straight off the top of my paycheck which greatly impacts my available funds. Also, my rent is cheap for my area - there's no way I could move without my rent going up $300/mo.

In providing materials, I went to the nth degree making sure everything was covered. It wasn't easy and it was nerve-racking but if you have documentation you can definitely satisfy their concerns.

[LadyInTheRed]

Thanks for the update, playdrums. It will help show others that as long as your petition is accurate and you have documentation to prove it, you can deal with questions and demands for documents from the US Trustee. It may be a pain, but it doesn't mean you will not get your discharge.

Congratulations on getting through it!

[justbroke]

I am happy to read this. When you keep good documentation and comply with the UST requests, they are reasonable.

[magic13]

Aren't those the documents that a attorney requests when you initially file anyway. Can you file without having these requested items available

[justbroke]

Aren't those the documents that a attorney requests when you initially file anyway. Can you file without having these requested items available

These are not typical documents and not a normal document production request. When the United States Trustee (UST) gets involved, they are digging deeper than the face of the 70-page petition. Typical UST requests are usually deeper than any (Panel) Trustee request.

The fact of this particular case and forum member is that they are over-the-median in income. You should always expect a UST inquiry when you are over-the-median especially with expenses that are out of the norm ("significant" mandatory payroll deductions). The UST is doing their job by insuring that the deductions are required (court ordered such as domestic support obligations) or mandatory (some companies have mandatory retirement contributions taken from the checks).

In 95% of Chapter 7 cases, the UST is not interested. This is for the 5% and typically that same 5% are the over-the-median income cases.