Is there anything I can do to make my ch 7/341 go smoothly

[filed]

Filed a voluntary no asset 7, wife has steady job, and her income puts us about 7K over median. We have 2 kids, and with IRS standards and childcare we are qualify under means test. I used to be very well compensated, and we had savings, and my wife did not work.

About 7 years ago, I fancied myself an entrepreneur, and began using/losing all of our savings on several different business ventures. As these consumed our money, my wife went back to work about 3 years ago to help stop the burn. On schedules, I have listed about 10 different ventures that are valueless and have been closed down 1-2 years ago. Our tax return shows large capital loss carryforwards. Approx 2 years ago, I tried one last business, tried insurance sales with a person who had been in insurance for years, and it was just a money pit as well.

That was my last shot, and only after it failed did my wife and I realize we had to file. My income has been zero for more than 2 years. Over 120,000 in cc debt, owe 400K on house that is worth maybe $275K, and have judgement from bank who lent us unsecured 250K. No asset transfers within last 2 years, no cc charges in last 6 months, but, I did have to list about 10 old businesses on the schedules as I had equity interests in them within 6 years, even though all are now gone or shut down and have no value.

As mentioned, the last business I was involved in was multi member LLC, and I owned a minority interest. No assets, maybe a computer, a table/desk and a couple chairs. It is technically still "open" but, as soon as he knew I was filing, the majority member stopped coming in, and went and got a job at another firm, so, it is now defunct, and I doubt either of us will spend the money to pay the accountant to even complete the books.

Worried we are over the median with lots of debt - so, invites scrutiny from UST, etc...Worried it will drag on for a long time.

Also, we have one vehicle that book says is worth $3,700, but, carmax says $1,500 as it has issues with A/C, dents, etc... At least $1,700 of that is not protected by exemptions.

Also, have 2 old small boats that have sat in the yard for 5 years without moving, I put them on schedules at $300 each, prob not worth that. My attorney says prep for the 341 will only take 5 minutes, and I just don't think that is right.

Looking for any suggestions. Great forum with generous contributors, my thanks in advance.

[LadyInTheRed]

Welcome to the board, filed!

The US Trustee may have questions about your businesses and may request documentation. There is nothing you can do to prevent that or prepare for it other than make sure all of your records are in order. Your attorney will help you respond to question when they come. Your case could take longer to close than others while the trustee investigates and sastisfies himself that there are no business assets to liquidate. He also might be quickly satisfied after asking a few questions and reviewing some documents. There's nothing to worry about as long as you are honest and are not trying to hide anything.

There also isn't anything you can do at this point to prevent the trustee from trying to force you into a 13 if he has a problem with any of your expenses. Your attorney will deal with that if the issue arises.

As a board member likes to say (Frogger, I think): "BK is a process, not an event". Go through the process one step at a time and try not to stress about the what ifs. For now, all you need to worry about is making sure you show up at the 341 with your ID and any other documents you are told to bring.

About the LLC, I'd be careful about just letting it die without wrapping things up. I don't know about Florida, but in California there is an annual state tax that must be paid. There is also an informational form that must be filed with the secretary of state every 2 years and penalites if it isn't filed. The members of the LLC will be held responsible for unpaid taxes and penalties. Make sure there aren't similar requirements in Florida that you could be held personally liable for. Also, you should file a final federal tax return for the LLC. Otherwise, the IRS might come knocking.

[filed]

Thank you, LadyInTheRed for the favor of your reply! If the US Trustee requests documentation, what would he/she likely request, and when/how would I be notified of the request? As to wrapping up the last one: The LLC is an insurance (sales) company, and I only have a minority interest. I am not in control of anything, and I do not want to incur any additional expense with regard to this thing, even if its just $100-200 to shut it down. I have had others that failed and just let them die (these are on my schedules as well) and a check of the state website just shows the name of the LLC and the status of inactive, I think this one will dissolve the same way. In Florida, in order to own an insurance company, you have to have an insurance sales license. Besides the fact that there are no assets beyond a table, desk, chairs and an old computer,and likely debt associated with the principal not paying rent and electric, the trustee is likely not a licensed insurance salesman so there is no prospect for generating any income. Since there are likely questions to come my way, do you (or anyone else?) have any insight regarding what the actual questions may be?

[Charlie777]

I was over median but didn't have the recent closed business issue. I don't think the 341 will be an issue, be sure you have all the Trustee asks for (mine had a comprehensive list of documents and questions, my lawyer made sure we had provided everything in advance and had copies with us). My 341 was about five minutes.

Any challenge to your eligibility to file Chapter 7 will come from the US Trustee after your 341. I don't think that's likely, and you should be in good shape if there is one. Having a reasonable explanation for your valuations and the written Carmax offer for your car will really help.

[filed]

Thank you, charlie777. When does the Trustee typically make the request for documents, etc? We filed about 2 weeks ago, and there is about 3 weeks until the 341. I believe my attorney automatically provides the Trustee with a copy of the most recent tax return. I have also read about the possibility of being selected for a random audit by the UST office, but I think I heard that IF that is going to happen, you know about it within 10 days of your actual filing date. When/how do you know if you are/are not selected for the random audit?

[ValleYum]

Hi Filed!

You are too new to get Private Messages, so I will have to say this on your post. I preface this remark with the hope that you will see it as being helpful to you!!

One of the moderators adjusted your first post because paragraphs make it easier for forum members to read. You are much more likely to have people actually read your entire post and respond if you make paragraphs for your separate thoughts and questions.

I will use, for example, your post #5 in this thread. If you had started a new paragraph at: "I have also read...." it would make that post an order of magnitude easier to read.

Back to your question, you can find a great article to read about bankruptcy audits here: http://www.ehow.com/info_8568893_ban...g-audited.html There are more links to other articles about BK audits at the bottom of the article linked above, too.

Welcome and I wish you all the best in your bankruptcy journey.

[filed]

ValleYum, thank you for your reply, and may I say that that was perhaps the most polite constructive critique I have ever received! I will gladly take your advice with thanks.

I read the article and the links, and in the first one it states:
1. A non-business Chapter 7 or 13 bankruptcy case is selected for audit within 10 days after the date the bankruptcy petition was filed. An audit firm is immediately assigned to the case.

Since I am now over 2 weeks since filing date, I can rest easy that I am not selected for a random audit, at least I have not been notified of such by my attorney. Assuming he is not delinquent in telling me, and that he would have been notified several days ago, it appears I have cleared this hurdle, however small it may be.

Again, my sincere thanks for your reply, and for all the people who generously contribute a wealth of knowledge to all the participants in this forum. I wish I had found it long ago.

[Charlie777]

Thank you, charlie777. When does the Trustee typically make the request for documents, etc? We filed about 2 weeks ago, and there is about 3 weeks until the 341. I believe my attorney automatically provides the Trustee with a copy of the most recent tax return.

As I recall the attorney gave me the checklist about a week before the 341. This is going to vary by court and even by individual trustee. I chose well for my attorney, because he was very active in that particular court, and he prepared me very well for everything. I would rely on your attorney's advice and not worry too much.