Trustee wants to reopen case

[Spartan]

So, after the 341 meeting, you borrowed against your 401k to make a payment to an individual.

Correct me if I am wrong, but that seems to be none of the trustee's business. What basis does the trustee have to reopen the case?

[LostOne0069]

Was the $4000 debt listed in the BK?

If not, they may be upset that you didn't list all your debts.

If yes, then they may be upset that you made a "inside" payment to a creditor... regardless of the source of the money.

I think that if you got it from a 401k loan, you'll probably be OK... but I can understand why they're looking at it funny... you file bk,say you don't have any assets... then they find out that even before your bk was closed you wrote a $4000 check to pay off a personal loan.... if you look at it from THEIR point of view, it could look a bit fishy.

I'd just do what your attorney said, write up an explanation of what it was for and where you got the cash and send it to them. Hopefully they'll drop it.

In hindsight, I'm sure you realize that you should have waited until you were discharged to pay them back.... but hey, hindsight is always 20/20

[Spartan]

The question remains as to how the trustee would know about it. Correct me if I am wrong, in Ch7, You are not required to submit any bankstatement subsequent to filing.

[LostOne0069]

It's not on the "required" list of things to file, but frequently you are requested to submit bank statements. I had to give them statements from several years.

[Spartan]

What exactly are you referring to by "I had to give them statements from several years"?

Federal statutes on fraudulent transfer is 2 years while state's may be longer. So. conceivably, when they have reason to question you, they can demand to see bank statements going back many years.

But we are not talking about that in this case.

His action is post filing. I don't believe in Ch7 no asset case, that they would want to inspect your bankstatement, post filing, or post 341.

My attorney basically said while it is best to wait till after the discharge, after 341, you can pretty much "get on with your life and do what you see fit". At 341, the trustee will ask you if there has been any changes since filing. You can't do something and then lie about it there. Past 341, you can 'move on', so to speak, within reason, of course.

[FoolAndHisMoney]

This situation is very odd. I can't even see how the judge would want to reopen such an old case. Once the deadline and discharge come and go then that should be the end unless some sort of substantial fraud exists. Is this trustee backed up where they discover potential assets 18 months after discharge?

[onlineuse]

I would bet 10 to 1 no judge will allow this to be re-opened unless there is more to the story and it was really underhanded. The amount is minor it seems, so I cannot understand what the trustee is doing.

Also, how would he/she even know about this? That's what I don't get? How the heck would they have found out, they have no legal power I thought to check things after the case is closed/discharged so presumably they would have had to have known about this 2 years ago and did nothing. AKA, wouldn't a judge look at this and say "you had your chance"?

I do see it the fine line though, you did borrow money to pay one person but not all the others which seems strange. I guess my legal question and my curiousity would be to find out how the heck they found out.

[ChainSmokin]

I guess my legal question and my curiousity would be to find out how the heck they found out.

[Spartan]

Maybe someone else thought they should have got that 4k?

[falcon26]

Well it really doesn't matter because even if it gets reopened I have nothing, and I mean nothing. No car no savings, just a checking account which is almost always negative. I have 25K in my companies 401K but that's it. Can they take my 401K money? And what exactly happens when they reopen it? Do the creditors start calling again? I've already cancelled my landline I only have a cell phone now. I mean as far as the credit card companies are concerned this case was closed almost 2 years ago. So would the trustee call them up and say, Oh by the way his case was reopened? I moving out of state in early march. How will this affect anything?

[ChainSmokin]

[Spartan]

The only thing that can be said is, the 401k is safe. I don't know what to say about the rest.

[falcon26]

Well I gave the trustee an explanation of what the checks were for but no copies of them. I emailed the letter to her actually. She replyed within 10 minutes. She said that this wouls do and that she needed nothing further from me :-) Pretty simple I guess...

[freshstart2006]

That's great!