What if we terminate?

[HHM]

This concept is difficult to explain, but a denial of discharge is different from a dismissal. A denial of discharge is usually sought when the UST believes there has been some intentional fraud or wrong doing; the implication of a denial of discharge is that you can NEVER discharge the debts that were included in the BK.

Generally speaking, most of the time, the BK trustee, or the US trustee will seek a dismissal. However, if they believe the debtor is abusing the system or committing fraud, they will seek a denial of discharge.

I am sorry that you are freaking out, but I think you need to contact your lawyer on Monday and clarify the situation. If the UST is truly seeking a denial of discharge under 727, then you are probably...no offense...totally f ' ed.

[HangingOn]

I spoke to the attorney today and he basically said the only option was Chapter 13 because the UST was seeking a denial of discharge. Problem is we don't qualify for Chapter 13. Sooo, when you say we're totally f ' ed, what will they do to us?

ALSO, my husband has to go to the 341 continuation tomorrow~!

[HHM]

If the UST trustee is seeking denial of discharge, how exactly, do you not qualify for a chapter 13?

[HangingOn]

My husband is looking for a job.

Maybe I need a new lawyer??

[manglicmot]

OK, I've re-read this and I understand that an attorney from the UST office is seeking to have a denial of discharge in your case because your husband did not disclose liquidating an IRA and mutual funds in October of 2006. If that is indeed it, I think you may have a chance to win your case in front of the BK judge.

If you have a paper trail showing what you did with the monies, and you didn't buy luxury items, and you didn't hide the money, I think you can tell the judge exactly what you stated here, that you didn't know you were required to disclose it.

I liquidated a brokerage account prior to filing and I disclosed it to my attorney. I gave him all of my account statements for the last year and he uploaded all of that to the trustee when he filed my case. At my 341 the trustee looked at it and grilled me on it for a little bit, and then abruptly told me I was excused. So, it obviously concerned him, but he could tell I didn't do anything dishonest, and it was only $981 to boot.

I'm posting this because it seems like a situation similar to yours, but with the exception that you didn't disclose yours. It's reasonable to assume you didn't know that you had to and that it was an honest mistake.

In one of your posts you said you have a tendency to get flustered. Now is not the time to get flustered. Like HHM mentioned above, a denial of discharge is serious so you need to keep your head on straight and deal with this problem head on. Just tell the truth and hope for the best.

BTW, there is a poster here under the handle chain smokin or somthing like that. he had to fight with the UST too, and he won. You can too.

[HHM]

OK, I've re-read this and I understand that an attorney from the UST office is seeking to have a denial of discharge in your case because your husband did not disclose liquidating an IRA and mutual funds in October of 2006. If that is indeed it, I think you may have a chance to win your case in front of the BK judge.

If you have a paper trail showing what you did with the monies, and you didn't buy luxury items, and you didn't hide the money, I think you can tell the judge exactly what you stated here, that you didn't know you were required to disclose it.

I liquidated a brokerage account prior to filing and I disclosed it to my attorney. I gave him all of my account statements for the last year and he uploaded all of that to the trustee when he filed my case. At my 341 the trustee looked at it and grilled me on it for a little bit, and then abruptly told me I was excused. So, it obviously concerned him, but he could tell I didn't do anything dishonest, and it was only $981 to boot.

I'm posting this because it seems like a situation similar to yours, but with the exception that you didn't disclose yours. It's reasonable to assume you didn't know that you had to and that it was an honest mistake.

In one of your posts you said you have a tendency to get flustered. Now is not the time to get flustered. Like HHM mentioned above, a denial of discharge is serious so you need to keep your head on straight and deal with this problem head on. Just tell the truth and hope for the best.

BTW, there is a poster here under the handle chain smokin or something like that. he had to fight with the UST too, and he won. You can too.

Good point. I wanted to convey to you the implications of a denial of discharge, but I did not want to discourage you from taking some action. I think Manglicmot has a point, ultimately, there will be a hearing on the UST's motion and you will be able to present your side of the story. What you need to do is gather the paper trail for the assets you liquidated and what you did with the money. Denial of Discharge is based on "intentional" wrongdoing, so what you need to do is demonstrate to the court that you had "clean hands" when you liquidated and the purpose of the liquidation was not to defraud creditors.

You may need a new attorney, or you may not, but don't focus your energy on that...you need to get yourself ready to defend yourself...a new attorney is probably not going to be able to stop the hearing.

[HangingOn]

Our attorney never asked for assets a year back. He gave us a form and on that form it stated "lis assets THAT YOU HAVE". It was even capped like that. Sooo, we listed what we currently had. We intend on bringing this form to court so I don't know if it's wise to have our attorney represent us when it was his fault! I hardly think he's going to want to admit that in court.

Also, yesterday at the 341 continuation, there was a man that did not claim an asset from last year and the trustee asked who his attorney was and sure enough it was the same attorney!!!

This is why I'm thinking about talking to another attorney.

One more thing I'd like to add. The Trustee said that they had evertyhing they needed and that it was up to the UST and the hearing at this point.

[alh]

One thing to keep in mind too. If things look a little unusual on the surface the trustee or the UST may want to have a judge rule on it to help protect their job. It is much safer for them to have a judge rule on something questionable than to just let it go. They have jobs to protect as well.

So a hearing is not the end of the world (although it may seem like it). Remember it is the judge that makes the decisions not the UST.

[NotFun]

This concept is difficult to explain, but a denial of discharge is different from a dismissal. A denial of discharge is usually sought when the UST believes there has been some intentional fraud or wrong doing; the implication of a denial of discharge is that you can NEVER discharge the debts that were included in the BK.

Generally speaking, most of the time, the BK trustee, or the US trustee will seek a dismissal. However, if they believe the debtor is abusing the system or committing fraud, they will seek a denial of discharge.

I am sorry that you are freaking out, but I think you need to contact your lawyer on Monday and clarify the situation. If the UST is truly seeking a denial of discharge under 727, then you are probably...no offense...totally f ' ed.

when you say the debts that were included in the bk can never be discharged, then what happens? You have to continue on paying them? What if you can't?

[Lindsay]

when you say the debts that were included in the bk can never be discharged, then what happens? You have to continue on paying them? What if you can't?

I wonder about this too. This is a horrible scary story. Was there ever another update?

[HHM]

when you say the debts that were included in the bk can never be discharged, then what happens? You have to continue on paying them? What if you can't?

I am hopeful for an update too...in any event, to answer your question? Basically, the debts remain fully collectable. What usually happens is, if the bankruptcy is denied discharge, the creditor will seek a judgment and simply attempt to collect the judgment.

[Bandit]

Doesn't everyone get 'audited', at least to some degree when they file for BK? How can someone not be audited? I mean, they are already asking for everything from wages to assets to taxes to bank statements to debts and can go back up to 10 years... clear down to our underwear and holes in our socks.

Just wondering.

Also, if the first BK gets messed up and/or dismissed can't they try it again in a few months?

[Lindsay]

Doesn't everyone get 'audited', at least to some degree when they file for BK? How can someone not be audited? I mean, they are already asking for everything from wages to assets to taxes to bank statements to debts and can go back up to 10 years... clear down to our underwear and holes in our socks.

Just wondering.

Also, if the first BK gets messed up and/or dismissed can't they try it again in a few months?

I wonder that too. My lawyer has asked for everything imaginable: 2 years tax returns, 6 months pay stubs, credit reports, bank statements, titles to all vehicles, deed to home, recent tax bill/appraisal, copies of all bills and recent purchases, ect. There was a huge list that I've been trying to gather together but I'm not getting too far because the new semester just started at college!

Unless there was some major fraud or inside transfers, what would an audit reveal that all the above documentation wouldn't? Or do they specifically only dig for evidence of fraud like hidden assets during an audit?

[JRScott]

Doesn't everyone get 'audited', at least to some degree when they file for BK? How can someone not be audited? I mean, they are already asking for everything from wages to assets to taxes to bank statements to debts and can go back up to 10 years... clear down to our underwear and holes in our socks.

Just wondering.

Also, if the first BK gets messed up and/or dismissed can't they try it again in a few months?

An Audit is done of 1 out of every 250 cases. It is completely random. It is a very thorough affair. The UST digs deep in audit cases.

I hope that the OP was able to prove their intentions were not to defraud and were able to clear things up. Hopefully they'll be by to let us know.

If they couldn't I might try the angle of inadequate representation so that they might could get it dismissed.

[Bandit]

An Audit is done of 1 out of every 250 cases. It is completely random. It is a very thorough affair. The UST digs deep in audit cases.

I hope that the OP was able to prove their intentions were not to defraud and were able to clear things up. Hopefully they'll be by to let us know.

If they couldn't I might try the angle of inadequate representation so that they might could get it dismissed.

I wonder that too. My lawyer has asked for everything imaginable: 2 years tax returns, 6 months pay stubs, credit reports, bank statements, titles to all vehicles, deed to home, recent tax bill/appraisal, copies of all bills and recent purchases, ect. There was a huge list that I've been trying to gather together but I'm not getting too far because the new semester just started at college!

Unless there was some major fraud or inside transfers, what would an audit reveal that all the above documentation wouldn't? Or do they specifically only dig for evidence of fraud like hidden assets during an audit?

Well, did you list all those bricks of gold and diamonds buried in the backyard? I hope they don't start digging up my yard for that. They will never find any/it.
Just Teasing