Question Hi all. Want to help my 73 YO mother. Urgent info needed to avert frozen account.

[Hongda]

Hi all. This is my 1st posting here.
I really need some urgent advice by Sunday to help my 73 YO mother avoid a frozen account.
I'm trying to help her over the phone as I live abroad.

I'll try to make this as simple as possible.
First of all she has no intention of hiding money but just securing it so she can pay off debts.

This is her basic situation:
She has 55K in debts.

She filed for bankruptcy a few months ago in California buit then moved to Washgington as her lawyer said he could represent her in court. She moved there so her husband's kids could help her take care of their sick father (her husband).

At one point the court trustee needs several more papers from her including a list of what initial payments of a motel in her name was spent on.

She honestly doesn't know as her daughter in law managed the money, had alot of credit cards in my mom's name but the daughter in law died about 1.5 years ago.

Now due to lack of this paper the lawyer can't represent her or something and on Monday he said the bankruptcy will fall through, fail, become void....I'm not sure of the term exactly.

The worry now:
She worries soon after Monday the court will freeze her account but we really don't know how all this works.

Incidentally the motel buyers are suddenly pouring in remaining payments and she has like 60K in her account over the past few weeks with about 40K more coming.

She now wants to wait to see what happens with the BK failure and then pay off each debt herself on a case by case basis as the creditor calls resume one the know the BK failed.

But again, if for some reason the court freezes her account this will include everything she owes plus what is hers.

Next week she will meet an accountant to make sure her taxes are all in order and then proceed with the debts.

So my question is how should she secure the money in this account in case it gets frozen???

At first I thought she could maybe just put it all in cashiers checks and keep them at home. But I read somewhere that the court can actually freeze those.
Someone else suggested cash in a safe deposit box, but that seems like quite a hassle and I assume the court could freeze that also.

Please! any advice?????

Again; she has every intention of using this money to pay all the debts but just doesn't and can't cope with the complications of a frozen account and loads of court papers, hearing etc... She's 73 and just worn out from it all.

Furthermore the lawyer she last had was never available and always called and asked for papers like one day before he HAD to have them. His final advice to her was to not worry about it, nothing they can really do to an old woman and to just go ahead and spend some of the 60K. Of course she is not taking that advice.

Thanks for any helpful advice any of you can give.

[despritfreya]

There is way too much confusion in your post - maybe a language barrier.

It sounds like your mom filed a Chapter 7. Prior to filing she sold a hotel and took a promissory note for payment. After filing the Chapter 7 she continued to collect payments on the promissory note. Those funds are sitting in the bank (maybe some money was in the bank before filing and some after). The Chapter 7 Trustee is saying (and he would be correct) that the payments from the note (and the money in the bank) belong to the Bankruptcy Estate and is going to freeze the account that the funds are sitting in. Am I close?

It also sounds like your mom's attorney has withdrawn from representing her due to her inability to produce financial records, and that the Trustee is asking the Court to deny her a Discharge, NOT dismiss the case. Is this correct?

Lastly, it sounds like your mom is trying to find a way to keep the funds away from the Trustee. If my suspicions are correct as to what is going on, finding a way to get at and keep the money simply will not happen.

Please give us, if you can, a better and clearer picture of what is going on.

Des.

[Hongda]

despritfreya ,
Thanks for taking the time to reply. I think basically you have the picture down about right. Niether I or my mom really understand this stuff.

Basically all she understands is the lawyer, now apparently off the case, said the BK won't go through--he didn't elaborate on that. But we have no idea if that means the trustee is going to go after freezing the account once nobody shows up....or if it all just goes back to square one. She can't find out more as from day one this lawyer never returned calls and even his voicemail box was always full. He is clearly overloaded.
The only thing she ever mentioned about the trustee is they wanted an itemized list of expenditures from the original motel sale money to proceed with allowing the lawyer to represent her. She couldn't provide the list and so apparently he has no reason to go now.

You sound about right on the promisorry note. As I understand it she was recieving 1,400 per month on the note at the time of filing the BK. But then suddenly they deposited 60K over the past couple weeks. At the moment the account does not appear to be frozen.
She told the lawyer about the 60K and asked if she could just now pay off the debts herself directly. His reply was something like..."Why bother?, all these big companies get bailed out....just go ahead and spend some of it" !!! That should give you some idea of why we are both confused and in the dark. My God! what kind of legal advice is that?!
She then asked if she still owed him anything and he said no, the original 1,500 she paid him is it.

So basically she and I are in the dark as to what exactly is happening Monday on the BK hearing.
As far as she knows her account is open and she just wants to secure this money elsewhere and as I mentioned will pay each debt as they begin calling her once they know the BK didn't go through. She has no intentions of hiding the money but just doesn't want getting bogged down with some new legal surprises. She wants to pay the IRS, the debts soon and then see what's left for her. But if the account gets frozen this could take months and months. She's 73 and just doesn't have the mental and physical energy to deal with more legal complications.
Had she known the motel buyers were suddenly going to dump 60K into her account she probably never would have filed the BK in the first place.

So to sum things up: if the account is not frozen and she has no notice telling her not to touch it; can she legally move the money? And what would be the best way?

Thanks for your time and patience!

[despritfreya]

The first thing you need to do is sign up for PACER so you can see what is being filed in her case. I do not know the web site but do a search on this forum (or google or even the bk court web site for your mom's district) since many who post here use the service. There is a fee but it will be well worth it as you will be able to see everything that is going on.

I suspect that the Trustee is not seeking to dismiss the case. The promissory note (and all of the $$ associated with it that is sitting in the bank) is an asset of the bk estate and is most likely not exempt (protected from creditors). The Chapter 7 Trustee is now the owner of the note and the money, not your mom. He is going to utilize the asset(s) 1st to pay himself, 2nd to pay his lawyer (if and when he hires one) and then, finally to pay the creditors. Your mom, as it sits right now, better not try to touch any of the $$ as the money simply does not belong to her. If she does she will be "stealing" property of the estate and could face criminal prosecution in addition to the loss of her discharge.

I cannot comment on the attorney. All I can say, without knowing all of the details, is that it appears he is withdrawing his representation for some reason. That being said, it would be in your mom's best interest to find a replacement. If the Trustee is seeking to deny the discharge she has a major problem and cannot handle this on her own.

Sign up for PACER, review all of the pleadings and then let us know the actual status of the case.

Des.

[Hongda]

Thanks so much Des,
I just signed up for an account but apparently it takes a week and they don't give usernames and passwords over the internet.

She's just too tired to go through another lawyer. Guess she'll just have to roll with the punches and see if they leave her anything.

Yes, the lawyer stopped the case as he can't represent her without the itemized list of what money from the initial motel payment was spent on.
As I mentioned......that information is buried 6 feet under with her deceased daughter in law who "managed" her finances.

One thing concerning the promissory note that she always found odd was that the lawyer said he could probably save that. One issue is that half the note is in her other son's name and he is not part of the BK.

If the trustee does persue the case as you think is probably so; then it's also simply too far for her to travel at her age and she'll just be unrepresented and I guess they take whatever they want . I would suspect a trustee could run up some hefty lawyer fees which would wipe out anything that would have been left in the end.

Anyway, I'll call her again tomorrow and see if I can get any other information from any docuents she has that may give some better clues as to what is going on.

I think at least though she should give the IRS their cut out of the account. Maybe risky but I doubt anyone will try and file criminal charges for paying the IRS off.

Thanks again so much for your time.
Will post more later.
HD

[despritfreya]

HD,

In response to:

"One thing concerning the promissory note that she always found odd was that the lawyer said he could probably save that. One issue is that half the note is in her other son's name and he is not part of the BK."

She has a ½ interest in the asset. Unless there is an allowed exemption, on the day she filed the Chapter 7 her ½ interest was transferred to the Trustee along with all rights to collect on the note. I do not know how much was left owing on the note but, from your post, it was at least the 60K she received (I will assume there is still $$ owed). Assuming there is a valid argument that ½ of that belongs to the co-owner, the remaining $30K belongs to the Trustee and is more than sufficient for him to take an interest in (subject to any applicable exemption - look at Schedule C of her bankruptcy documents to see if the attorney tried to exempt the asset).

Based upon the limited facts presented and assuming there is no exemption to fully cover the asset (being a "Monday Night Quarterback" can be a bad thing) I would have either told her not to file a bk or if she needed a bk would have put her in a Chapter 13. Of course, regardless of the situation, I always have concerns over putting a more mature person into a bk.

Keep us posted.

Des.

[Hongda]

Hi Des,
Well she's more confused than I thought, can't find half her paperwork etc.... As I said I'm trying to help her over the phone from abroad. It is a chapter 7 she filed and it was extended several times as her husband is sick etc...
Anyway she is just totally confused and doesn't want to open a whole new case with a lawyer where she now lives.
So I advised her to just ask her accountant to reccomend a local lawyer and just do hourly cosultations and take it from there. That seemed to make her happy.

One question: is it likely a BK lawyer would have a Pacer account and be able to access it for her during a consultation session and let her know where she stands on the case?

Thanks again for your replies!!

[despritfreya]

Well she's more confused than I thought... !!

This is why I always have concerns over filing a bk for the elderly.

One question: is it likely a BK lawyer would have a Pacer account and be able to access it for her during a consultation session and let her know where she stands on the case?

If she is going to a bk attny the answer is "yes". I routinely pull up the prospective client's case so I can determine any course of action.

Des.

[Hongda]

Just an update.
Her lawyer calls her the other day, so apparently is still on the case. He asks for some papers she already said she sent or doesn't have then they get into a brief discussion about the money that keeps showing up in her account. He asks .."What money!?" my mom says, "the money I told you about last time we talked". Then he says don't do this and don't do that and...."Hold on and I'll call you back within an hour".
Several days later still no returned call. It just keeps going back and forth like this.
In the meantime we guess as each day passes the trustee is racking up a bigger bill?
Anyway, she did get to her accountant and has all her tax stuff in order which is good.

She asked the accountant to refer her to a bk lawyer for direct cnsultations in Aberdeen Washington but was told their are none there.
Nearest bk lawyers are several hours drive away which she is unable to do because of her age and her husbands condition.

I've googled and also can't find any Bk lawyers there.
If anyone here does then I'd appreciate the info!

[ValleYum]

Just an update.

She asked the accountant to refer her to a bk lawyer for direct cnsultations in Aberdeen Washington but was told their are none there.
Nearest bk lawyers are several hours drive away which she is unable to do because of her age and her husbands condition.

I've googled and also can't find any Bk lawyers there.
If anyone here does then I'd appreciate the info!

Google Bankruptcy in:

Hoquiam WA (less than 10 miles from Aberdeen)

- or -

Montesano, WA (under 15 miles from Aberdeen)

Google shows there are bankruptcy firms in both places.

Even if she had to go to Olympia, Washington (the state capitol), it is less than an hour from Aberdeen.

I wish you luck in helping your mother.

[Hongda]

An update.
So we decided to arrange for me to communicate with my mother's attorney by email and telephone now....to avoid any further confusion.
I talked to the attorney and he gave me a basic idea of what's going on with the case.
First off he told me the trustee had diverted any future payments from the joint escrow account to the trustee. And that my mother needed to send a check for 10K from those recent unexpected large payments. This makes sense to me.
Anyway he said he had mailed notification to my mother and would also email me the document/notice.
He said to make the check payable to "Chapter 7 Trustee".
I then asked if there needed to be a name or case number on that and he said...."oh..umm yeah ...maybe...right! yeah be sure and put a (-) after that with the trustees name....and it must have (-)....something...or else....
I then told him I'd like to verify that "payable to" info by email.
We make email contact and immediately I send another email asking him to clarify the "payable to" info so we can get it off ASAP as he requested.
Now keep in mind this 10K payment is demanded by the trustee within 10 days. Now around day 8 my mother has still not received this notification in the mail...........which means she wouldn't make the trustees deadline. Furthermore in the document/notice (which is between the trustee and my mother's attorney) sent to me the trustee makes some comment about my mother failing to provide and refusing to provide information.
Well....no wonder it appears so if she gets notices so late!

In the meantime.... about 4 days later......I still receive no response from my email asking to confirm the "payable to" information! Nor has there been any response from 2 other emails which I provided detailed information of other things the attorney needed from my mother!
I also arranged a callback number with same area code as the attorney for his convenience to call me anytime. I have called there several times to discuss the info I emailed to him and he wasn't in....and hasn't tried returning the calls.

Aha! So beginning to look like this isn't really just a case of an absent minded 73 YO woman after all.
Luckily we just took our chances on the document/notice he emailed me and sent a check directly to the trustee from that. If I hadn't asked for that by email my mother would have been late again....."failing and refusing to comply"!

Another issue we discussed on the phone is the joint escrow account and how to handle my brother's share. The attorney just asked me to tell him(the attorney) where to divert that and said it could be sent to me or someone else. I'm thinking to myself... "Could you just divert it to my cousin Jim-Bob's account?"
I then asked if it wouldn't be necessary for my brother to legally inform someone what to do with his share and the attorney said something like......" umm..ahh! yeah!..Maybe he should contact the escrow people and ask them what to do".

So my mom contacts the escrow account people and they inform her that the trustee is taking her share and turning the other share over to my mother's attorney and that my brother needs to consult with him(my mom's attorney) on the issue............and then asked my mom if that's ok. Ummm, like is there any choice in the matter?

Anyway, according to the document that asked for the 10K check it appears the case continues now and the trustee will now "Submit a notice of possible dividend and request a bar date soon" and "has continued the 341 (a) hearing.
I guess that means the beginning of the end?

One other notice my mother recently received from the trustee appears to be a copy sent to all the creditors concerning the case. At the bottom it says something like...
"Undeliverable mail to the following...... Ford Credit.....".
Which I guess means they tried notifying Ford but the mail keeps getting returned to sender. I guess this means they don't know about the BK.

I'm seriously wondering if the strategy in this BK case isn't just to create mass confusion and in the end everyone gets a little just to get it over with and it's on to the next one.

[despritfreya]

So it sounds like your mom's case has ended up as follows:

1. Trustee is now collecting ½ of the promissory note payments.
2. The other ½ that belongs to your brother is being sent (don't know why) to your mom's attorney. Your brother needs to make sure those funds get to him and maybe even get the Trustee to instruct the title company to send the $$ to him.
3. The Trustee has demanded payment of $10K from your mom, presumably covering funds she "wrongfully" kept once the case was filed. It sounds like these funds will be sent so this issue is resolved.
4. The Trustee has sent a "claims bar date" notice to creditor telling them to file claims if they wish to participate in a distribution.
5. The address to Ford Motor Credit is wrong. This needs to be corrected and your mom's attorney needs to send a Notice of Bk filing to Ford along with the notice to file claims. This is an asset case and if Ford does not get proper notice the debt owed to Ford will not be discharged.

All-in-all, with the exception of the communication issue with the lawyer, it sounds like the case is moving along quite nicely despite the rocky beginning.

Des.

[Hongda]

So it sounds like your mom's case has ended up as follows:

1. Trustee is now collecting ½ of the promissory note payments.
2. The other ½ that belongs to your brother is being sent (don't know why) to your mom's attorney. Your brother needs to make sure those funds get to him and maybe even get the Trustee to instruct the title company to send the $$ to him.
3. The Trustee has demanded payment of $10K from your mom, presumably covering funds she "wrongfully" kept once the case was filed. It sounds like these funds will be sent so this issue is resolved.
4. The Trustee has sent a "claims bar date" notice to creditor telling them to file claims if they wish to participate in a distribution.
5. The address to Ford Motor Credit is wrong. This needs to be corrected and your mom's attorney needs to send a Notice of Bk filing to Ford along with the notice to file claims. This is an asset case and if Ford does not get proper notice the debt owed to Ford will not be discharged.

All-in-all, with the exception of the communication issue with the lawyer, it sounds like the case is moving along quite nicely despite the rocky beginning.

Des.

Thanks for your reply.
Yes, I think you sum it up correctly as far as I can tell.
Accept for #3. What happened is the motel buyers suddenly made some large unexpected payments which was well after the original BK filing. Apparently the 10K is what the trustee calculates owed from that amount although it seems quite small to us.
Thanks for the advice about Ford. I'll have t contact them I guess. Oddly the repossession people I talked to a few days ago seemed to think the BK had been dismissed. I told them it had only been delayed.

[Hongda]

Another update.

Just had a brief conversation with the lawyer over 3 issues.
The first 2 we got over in about a minute.

I told him the Ford had been turned in also.

Then I asked how to handle another vehicle turn in...A Yamaha rough terrain vehicle RTV.
This is also listed on a B6D (Official form 6D) (12/07) SCHEDULE D - CREDITORS HOLDING SECURED CLAIMS form.
Each of the creditors is listed with only a P.O. box address.
I told him we don't know how to contact the lenders to arrange a voluntary surrender of the vehicle as we did with the Ford......and if he had any other info on the lenders. The schedule D form only lists a bank name and the P.O. Box address which isn't enough info for me to contact the actual lender with.
He replied....."So everything with the RTV is ok then?"
I told him he didn't seem to understand what I had just said and then he kind of went off on me and said...."Look! your mother isn't obligated to track down and turn in the vehicle which your brother left in some other state.....etc... they have been notified and haven't contacted me......etc....."
Then I asked why we shouldn't go to the trouble of turning it in as he said to do with the Ford and he said because "Ford never ignores anything".
I then asked if we need to eventually turn it in and he said..."Something like that"
Then he abruptly said he had to talk to another client and would call back. 5 hours later he hasn't.....and from such conversations my mother had with him in the past he probably won't



So now at a loss as what to do with turning in the RTV.

I assume it's to just be ignored at the moment as they have been legally notified.
But if it gets written off on the final BK and not claimed then what's to finally be done with it?????

Really confused on this and can't get any clear advice or lender contact info from the lawyer.

Would they be able to start calling my mother again and sending bills after it's written off on the BK?

I don't know weather to laugh or cry

[despritfreya]

. . .I asked how to handle another vehicle turn in...A Yamaha rough terrain vehicle RTV. . .I told him we don't know how to contact the lenders to arrange a voluntary surrender of the vehicle. . .

You have the name of the creditor? If so, "Google" it to get a phone number and physical address. That should do it.

Des.