What if we terminate?

[HangingOn]

My husband started Chapter 7. He got audited and it's turned into a nightmare beyond anything. What are the ramifications of cancelling the entire thing? How long would it take to cancel? What happens to the house we want to foreclose on (it was already granted automatic stay)? Can he try to file again within the 10 year time frame?

[keepmine]

You won't be able to cancel it. If the trustee feels there are assets to liquidate, they won't let it go.

[SinkingFast]

It's almost impossible to voluntarily have a Ch 7 proceeding Dismissed.

"There is no provision in the Bankruptcy Code which automatically allows a debtor to withdraw a Chapter 7 bankruptcy petition once it is filed. An application would have to be made to the Court in the particular district for cause. And, each district and judge has its own view towards allowing voluntary dismissal."

http://bankruptcy.lawyers.com/ask-a-...tion-5795.html

I know you don't want to hear this, but,........... Your best bet is to just suffer thru the Audit and do the best you can providing info that's requested.

Even if your case weren't pulled for the Audit, you could go thru the same thing for any number of reasons. The UST's Office can kick out a case for further documentation when ever they want. High income filers. Small business owners. A few other general categories are almost always asked to provide extra documentation.

[HangingOn]

The attorney who did the audit said that the case would probaly be dismissed. He said it didn't look good (about the discharge). He earlier said that he wanted to bring me and my parents in for questioning too (I guess if he continues on with the case). We don't want my parents brought into this. Heck, they don't even live in the same state!! Anyway, ironically, I have to now HOPE that they'll dismiss. Sucks. Oh yes, on pacer it says it's a no asset case? Not sure what that means.

[freshstart06]

not to be nosey or anything but is there anything you have to hid??? If not and it is just a matter of providing more documents then you should still be okay but if there is something to hid, from what I am learning just don't provide the requested docs, say you can't find them or come up with something and most likely the case will get dismissed.

[HangingOn]

My husband is not hiding anything. We just don't want my family involved in this. I get flustered under pressure so I'd probaly screw things up if he called me in. The attorney hasn't requested any more docs yet but he did say it didn't look good that we'd get a discharge. The longer this drags on the longer it takes for our lives to get back to normal.

[manglicmot]

If you haven't hidden anything I don't see how your case is going to be dismissed. The case will simply proceed after the audit is complete, you have nothing to worry about.

[frankies_mom]

What is the attorney's reasoning for saying the case does not look good for discharge? Did you file pro se? If not, what did your attorney say?

In different states are some of the bankruptcy laws more lax than others? I only ask because I live in Connecticut and it seems pretty lax to me. They don't want me to bring paystubs or bank statements to the 341- I asked about 4 times now. And when I asked about switching jobs they said sure that would be no problem. I would be worried, but my attorney does like 10 cases a day so I feel confident they know what's what. And I know two people who have gotten their Chapter 7's voluntarily dismissed, just by filing a letter with the court.

I dont' know, just my experience here in CT. So there might be a chance to have your case voluntarily dismissed if it is really something that you want to do.

[SinkingFast]

With the attny saying the Trustee might wanna speak to your parents,......... I have to wonder if you had some sort of exchange of Assets within the Presumption period.

Did you exchange (buy or sell) property, a car, or other asset, with your folks within a year or 2 prior to filing??

The attny you spoke with,......... Does that attny work in the UST's Office??

Since you're looking at PACER,........ Have you had your 341 and into your 60 Day Objection Period?? Has the UST's Office filed an Extension??

[HangingOn]

He had the 341 and he was asked to bring in more docs which he did that day and the trustee said he would probaly dismiss the case.

Then came the audit. The attorney works for the UST. No, the UST has not officially filed an extension (it would appear on pacer right)?

The attorney was upset because my husband didn't disclose the fact that he cashed in his IRA and mutual funds to pay bills. My husband did this in Oct 2006 (outside of 6 months). He didn't feel that had to be disclosed for income. Soooo, the attorney feels that my husband was being fraudulent and said he'd likely dismiss the case.

[HHM]

You won't be able to voluntarily dismiss the case, but if you fail to cooperate, then the BK Trustee or the US Trustee will dismiss the case. However, the remifications of having the BK Trustee or US Trustee dismiss your case can be huge.

At this point, you should probably get an attorney to advise you.

[SinkingFast]

Technically, I guess you should have disclosed cashing out the IRA and mutual fund. Both were major assets that you disposed of within 1 year prior to filing.

Your attny should have asked about this prior to filing. They know the look back time frame on liquidation of assets is 1 year. Every attny we Consulted gave us a "Questionaire" that had that question listed. I'm guessing your Hubby didn't understand he needed to list the Retirement Funds as an asset that had been liquidated. Which is an understandable mistake.

But your attny should have also asked about the retirement funds. Hubby had to provide 2-4 years of filed income taxes along with income statements which would have included the 1099's from the IRA and the mutual fund. The attny should have asked, "What did you do with these monies?" So the attny fell down on his job too.

You've provided the supporting documentation. Your bank statements should show the monies from the funds went into checking and back out again to pay bills.

Sounds like your attny is thinking "worst case scenario". BK Fraud is more than your Hubby's actions prior to filing. BK Fraud also includes intent. And cashing out retirement funds, which were placed in checking, to pay regular living expenses is not intent to conceal assets.

The UST's Office is reviewing your documentation. As long as nothing is showing on PACER,............ So far so good.

[HangingOn]

Well, it looks like the UST is going after a 727 to have the case dismissed. Now attorney says that we have to file 13. Problem is we can't qualify for a 13. What happens if we let the UST discharge?

[HHM]

Well, it looks like the UST is going after a 727 to have the case dismissed. Now attorney says that we have to file 13. Problem is we can't qualify for a 13. What happens if we let the UST discharge?

Umm, you need to be more specific....

If the UST is truly going after a "Denial of Discharge", that is VERY VERY BAD. The worse case scenario is that your case stays open but you NEVER receive a discharge, and you can NEVER, in the future, discharge any of the debt included in that BK.
A denial of discharge falls under 727, the grounds for a 727 are generally very narrow and usually mean that UST believes you have intentionally committed some type of fraud or wrong doing.

If the UST is simply dismissing your case, then that is not so bad. That usually means you cannot re-file for six months, and depending on the reason for dismissal, if you do refile, you will need to have a court hearing to demonstrate that your refiling is not an abuse of the BK system.
A dismissal falls under 707.

[HangingOn]

I thought that a 727 meant that they want the case dismissed (and not discharged ever).

Why keep a case open that you never plan on discharging? Wouldn't that just take up more of the UST's time? Will they at least try to go for a dismiss first?

What is going to happen if the case stays open? I'm totally freaking out right now.