Debtor chpt 7

[Lbrtd42020]

Filed chpt 7 over yr ago due to Covid-19 and divorce. Already participated in several 341 meetings. Debt was confirmed to creditors and assets identified to satisfy debt. Trustee’s attorney files adversary case in regards to my residence that I’ve been a tenant for over 20 yrs. Deed and tax records show that I don’t own the residence. Is this usual procedure or unethical?

[justbroke]

Welcome to BKForum!

The question on your residence an ownership seems to be a question for the Chapter 7 Trustee. I can't tell you what they see, but for some reason they see that you may own it. Perhaps you did own it at some point and did a QC (quit claim), sold it to an insider (family, friends, business associates), or sold it for less than fair market value (FMV). Without details, there's no way to tell the Trustee's theory on ownership.

Unethical? No. This is their job. They are to find assets that are owned, or partially owned, by the bankruptcy estate. There are a bunch of rules about how far they can go back to look at things. So many factors and it's way too much to speculate.

[flashoflight]

When I handled my parent's chapter 7 years ago, the trustee went almost four years back to see if the house was sold for FMV to an insider (me) and to make sure my parents weren't paying on the new mortgage after the sale via a few years worth of bank statements. It's a big red flag when your house is sold and you're still living in it after the sale. I was probably a stone's throw away from an adversary proceeding against me on my parent's case. I can tell you that not being on the deed anymore is not by itself sufficient protection against the trustee if they feel the house sale smells fishy.