Chapter 7 asset - paying unsecured creditors

[kasey227]

Wasn't sure where to post this, so please, move it if necessary.

Husband and I were discharged in March of this year, chapter 7 asset case. We only had unsecured creditors (credit cards). We are currently awaiting court approval for sale of property by the trustee.

The deadline for creditors to file proof of claim was April 27. According to PACER's claim register, only two creditors have filed - which is only about one third of the money which will be available for disbursement after the sale is done. What happens to the rest of the money? (after trustee and her attorney and accountant get paid)

This is California, if that makes any difference. Looking forward to any replies - even best guesses! When its all said and done, I'll update this post. Thanks.

[despritfreya]

If there are sufficient funds on hand to pay all allowed claims you have what is called a "solvent estate". Once all claims are paid (including the Trustee and his attny - if any), any remaining amounts will be returned to you. See 11 USC 726(a).

Please note. . . while I have never seen it happen, a Trustee can "solicit" late filed claims to increase the payout to creditors. So. . . the bottom line is "it ain't over till the fat lady sings".

Des.

[kasey227]

Thanks - interesting term "solvent estate". Never thought I would see anything like that possibly applied to our account! I would imagine it would open up a can of worms with taxes and so forth related to the sale of the property.

Just happy at this point being debt free and learning to live within our budget.

Will update when all is said and done - waiting for the fat lady to sing!

[kasey227]

Well - still waiting! The property finally closed 2 weeks ago, so the trustee now has the $$. I see in the Handbook for Chapter 7 trustees, that the trustee can contract creditors who have not filed claims - and since the trustee's payment depends on claims disbursed, I don't anticipate any cash being left over.

Enjoying debt free life, living within out budget, and actually saving a bit each month!!!

[kasey227]

Hmmmmmmmmm... the fat lady is clearing her throat, and the piano is warming up. The trustee has issued her final report, and the final meeting with the judge is 2/3/16. And a fair chunk of change left over to be refunded!! I can't believe it is taking this long. Anxiously waiting for next week.

[despritfreya]

Hmmmmmmmmm... the fat lady is clearing her throat, and the piano is warming up. The trustee has issued her final report, and the final meeting with the judge is 2/3/16. And a fair chunk of change left over to be refunded!! I can't believe it is taking this long. Anxiously waiting for next week.

Be patient. Everything in due course. Money will be returned to you when the time is right.

Des.

[kasey227]

WOW - It is finally over. Nearly 14 months since we filed. We received several thousand dollars back after allowed claims were paid. All that's left now is for the checks to be cashed, then the case closed! Couldn't have happened at a better time - we need some serious roof repair!

What I find interesting is that the trustee, accountant and attorney received nearly double the amount of the claims that were paid. Oh well, the job to be in, I guess.

[despritfreya]

What I find interesting is that the trustee, accountant and attorney received nearly double the amount of the claims that were paid

That is how the system works. Trustee and his/her attny get to line their pockets before the creditors pick up the scraps.

I am glad you are now able to move on. Best of luck in all of your future endeavors.

Des.

[kasey227]

That is how the system works. Trustee and his/her attny get to line their pockets before the creditors pick up the scraps.

I am glad you are now able to move on. Best of luck in all of your future endeavors.

Des.

I'm sure it's not an easy job, and the trustee probably doesn't make more than her $60 on the big majority of cases. She did treat us well, and we really have no complaints on the process. It was just hurry up and wait for the last year! No so sure about the attorney & accountant - read their application for compensation, they seemed a bit exaggerated. The judge didn't seem altogether "thrilled with how the case went down", but he went ahead and approved them.

Anyway, I could rant and yak for ages - but thanks for the forum and the help it provided!