Bankruptcy Trustee Finds New Way to Increase Estate: California stunner!

[tobee43]

It doesn't even need to go that far. The Office of the United States Trustee could do this with a mere memo.

I think the OUST could easily just refer to Iuliano v. Brook, 2011 U.S. Dist. LEXIS 47156 (M.D. Fla. Apr. 29, 2011) which was Judge Moody's decision in Tampa (Middle District of Florida).

so why aren't they??? one would like to think the complaints are going somewhere about these cases?

[justbroke]

so why aren't they??? one would like to think the complaints are going somewhere about these cases?

I don't think there are "complaints". Remember, that many like to just glide through the process, not rock the boot, and certainly not draw the fury of the panel Trustee. Then you have the cost of litigating (fighting) the Trustee and I think it just simply comes down to attrition. That is, the cost of litigating is not worth fighting. Perhaps there are some attorneys that like to do things pro bono or to establish caselaw (there is actually an attorney in Jacksonville, Florida who does this type of thing pro bono), but the fact is that most would need to pay their attorney $150-$250/hr (or more) to litigate this.

The case I presented above actually went to the "District Court" for review and they affirmed the lower Bankruptcy court ruling that denied the Trustee.

[tobee43]

I don't think there are "complaints". Remember, that many like to just glide through the process, not rock the boot, and certainly not draw the fury of the panel Trustee. Then you have the cost of litigating (fighting) the Trustee and I think it just simply comes down to attrition. That is, the cost of litigating is not worth fighting. Perhaps there are some attorneys that like to do things pro bono or to establish caselaw (there is actually an attorney in Jacksonville, Florida who does this type of thing pro bono), but the fact is that most would need to pay their attorney $150-$250/hr (or more) to litigate this.

The case I presented above actually went to the "District Court" for review and they affirmed the lower Bankruptcy court ruling that denied the Trustee.

so, then, basically, or better stated, it's a no win situation, or falls under the category "you can't beat city hall". very discouraging.

what seemingly is more discouraging, and i will mention it again, while these types of situations have always taken place, i do believe they are happening at a higher rate than they use to. i have nothing, no vitality to back my statement. such as any substantial statistical study, just what i read on blogs and in the papers, and actually here on this site.

are we seeing this type of treatment increasing in the courts today. and, while you have pointed out in another thread, it could be the homestead exemption which attracts the TT's like pooh to honey. (that's winny ;))

besides that fact the trustees get their pockets lined. i know, i know, it's their job

[jst4f]

besides that fact the trustees get their pockets lined. i know, i know, it's their job

Their job is to get money for the creditors and not punish debtors. They are given a cut of the money as an incentive to go look for money. The trustees doing this seem to have forgotten the second fundamental aspect for their job. Greed can be the basis for a great deal of rationalization and self delusion.

[justbroke]

what seemingly is more discouraging, and i will mention it again, while these types of situations have always taken place, i do believe they are happening at a higher rate than they use to. i have nothing, no vitality to back my statement. such as any substantial statistical study, just what i read on blogs and in the papers, and actually here on this site.

That's exactly the sentiment of one of the newsletters I read from a prominent Middle District Attorney. The Trustees are "mad" with the recent Osbourne decision, so are looking for money. Osbourne dealt with whether the phrase "claim or receive the benefit" from the homestead exemption means that if you keep your home, regardless of equity, you still "receive the benefit". (Okay, it may not be Osbourne and I'm too lazy to look right now, but I think it's Osbourne.)

Some trustees have moved on and found other ways to make a living. However there are several in the Middle District and throughout Florida that have found "creative" ways to earn money. Remember, the trustees can't survive if they only get the $60. They need to find money in at least 5% of the cases... which seems to be about the norm for Asset vs Non-Asset cases.

Don't quote me on the percentages, but that's the way it looks to me.

[tobee43]

That's exactly the sentiment of one of the newsletters I read from a prominent Middle District Attorney. The Trustees are "mad" with the recent Osbourne decision, so are looking for money. Osbourne dealt with whether the phrase "claim or receive the benefit" from the homestead exemption means that if you keep your home, regardless of equity, you still "receive the benefit". (Okay, it may not be Osbourne and I'm too lazy to look right now, but I think it's Osbourne.)

Some trustees have moved on and found other ways to make a living. However there are several in the Middle District and throughout Florida that have found "creative" ways to earn money. Remember, the trustees can't survive if they only get the $60. They need to find money in at least 5% of the cases... which seems to be about the norm for Asset vs Non-Asset cases.

Don't quote me on the percentages, but that's the way it looks to me.

that's what gets me!

Some trustees have moved on and found other ways to make a living

okay, i get that. however, $60 a case in today's bk market, and what?? how many cases on an average does one trustee have. all i can say is far more than let say, 10 years ago, when we didn't see this type of behavior going on.

so, whether it's the influence of the Osbourne or any other decision to find other ways to get more money. i would say if someone has 50-100 cases a month on average they'd be doing fairly well. that is of course, they were living within their means, and not beyond , in which case perhaps they should consider downsizing like we all have had to do. LOL!!!

besides, those that are trustee are usually from practicing atty firms and get paid in other ways from other sources. an example off the top of my head, ( and not applying to being a trustee) is, i knew an atty that was a municipal court judge, a very busy one at that, yet after court, he still did real estate closings, civil cases and was an active partner of that firm. my point being that most of these people are partners or connected with a firm, and still get a percentage or something in the form of payment from the firms they belong in.

someone on another thread mentioned their trustee was a accountant, i thought interesting, even think it was mentioned an forensic accountant. somehow, i just don't pity the trustee that yells fowl, ( and yes, i do me chickent) i'm not making a living. go to work like all of us regular folk. LOL!!!

[tobee43]

Their job is to get money for the creditors and not punish debtors. They are given a cut of the money as an incentive to go look for money. The trustees doing this seem to have forgotten the second fundamental aspect for their job. Greed can be the basis for a great deal of rationalization and self delusion.

indeed, and i do believe that is the case in these situations.

[justbroke]

so, whether it's the influence of the Osbourne or any other decision to find other ways to get more money. i would say if someone has 50-100 cases a month on average they'd be doing fairly well. that is of course, they were living within their means, and not beyond , in which case perhaps they should consider downsizing like we all have had to do. LOL!!!

Actually, 1,000 cases a year only means $60K in revenue. You must also factor in their staff in the office. You could easily be paying -- with benefits -- one paralegal $60K. Prior to the decision in Osbourne, the Chapter 7 (Panel) Trustee could easily rest on the fact that if a debtor wanted to keep their home -- In Florida -- without regard to equity, they'd lose that juicy $4K (per debtor) "unused" homestead exemption! That meant... easy pickings and made a good number of cases in Florida "asset" cases. (Much more than the 5% I mention above.)

Many of the Trustees on the Panel of Chapter 7 Trustees that I've seen, have their own practice; some are from a larger firm. Most of these Trustees also practice bankruptcy and asset protection law anyhow so they do have other ways to "earn" fees. However, why would you want to be a Trustee if you lose money?

That doesn't excuse any Trustee from overstepping their boundaries. I find that most of these Trustees that go outside the box are just doing that. Thinking outside the box and perhaps making a name for themselves in the meantime. Even if it's a bad name, that could be powerful in the whole Trustee business. Think about it... "that Trustee is evil"... makes debtors and other attorneys not want to get on their bad side! Yes, there have been Trustees rebuked and one was even disbarred for unethical practices. It doesn't happen often but they do get spanked by the Court on ocassion.

[tobee43]

Actually, 1,000 cases a year only means $60K in revenue. You must also factor in their staff in the office. You could easily be paying -- with benefits -- one paralegal $60K. Prior to the decision in Osbourne, the Chapter 7 (Panel) Trustee could easily rest on the fact that if a debtor wanted to keep their home -- In Florida -- without regard to equity, they'd lose that juicy $4K (per debtor) "unused" homestead exemption! That meant... easy pickings and made a good number of cases in Florida "asset" cases. (Much more than the 5% I mention above.)

Many of the Trustees on the Panel of Chapter 7 Trustees that I've seen, have their own practice; some are from a larger firm. Most of these Trustees also practice bankruptcy and asset protection law anyhow so they do have other ways to "earn" fees. However, why would you want to be a Trustee if you lose money?

That doesn't excuse any Trustee from overstepping their boundaries. I find that most of these Trustees that go outside the box are just doing that. Thinking outside the box and perhaps making a name for themselves in the meantime. Even if it's a bad name, that could be powerful in the whole Trustee business. Think about it... "that Trustee is evil"... makes debtors and other attorneys not want to get on their bad side! Yes, there have been Trustees rebuked and one was even disbarred for unethical practices. It doesn't happen often but they do get spanked by the Court on ocassion.

really? i was under the impression for some reason that office staff was paid by federal and state funds and they were court employess? not so??? interesting?

and, exactly, why in the world would they, a trustee take a job that pays nothing or too little to live. that would most certainly be their own choice, right.

[HHM]

Most trustees do okay, it really depends on the state and US trustees. The US Trustees are fairly good about balancing the number of trustees so they can earn income.

So, for example, in a state like Nevada, with very liberal exemptions, the trustees have a very high case load, well in excess of 2000 per trustee per year. In a state like Colorado, with average exemptions, the case load is more like 1000 cases per year.

[tobee43]

Most trustees do okay, it really depends on the state and US trustees. The US Trustees are fairly good about balancing the number of trustees so they can earn income.

So, for example, in a state like Nevada, with very liberal exemptions, the trustees have a very high case load, well in excess of 2000 per trustee per year. In a state like Colorado, with average exemptions, the case load is more like 1000 cases per year.

i would think so as well. they aren't going to work in the field unless it's worth their while. let's face it, today most likely than at any other time in the history of bk's, these trustees are doing much better than most!

[jst4f]

Based on what was written here I was able to do a little research on these FL middle district trustees, one in particular. He has been a very very busy trustee. Searching Google he has been involved in almost 10 times more court cases than the trustee for my BK. From what I read he has been consistently stopped by the courts. There may be some creativity leakage out of FL to the rest of the country, but I doubt it given his poor record in the courts. I feel sorry for the folks he dragged through the courts due to his idea helping the creditors.

[tobee43]

Based on what was written here I was able to do a little research on these FL middle district trustees, one in particular. He has been a very very busy trustee. Searching Google he has been involved in almost 10 times more court cases than the trustee for my BK. From what I read he has been consistently stopped by the courts. There may be some creativity leakage out of FL to the rest of the country, but I doubt it given his poor record in the courts. I feel sorry for the folks he dragged through the courts due to his idea helping the creditors.

now that is REALLY scary!

[keepsmiling]

I understand that tt jobs are patronage jobs. You have to have an "in" to get one.

[tobee43]

I understand that tt jobs are patronage jobs. You have to have an "in" to get one.

from what i understand you certainly do.

while we were having our 341 there were 4 hearing rooms, two on one side and two on the other side of a very small hallway, waiting area. one could actually hear with the door open what was going on in each. since we were there early and all the doors to the hearing rooms were open i heard two men speaking and i peeked in.

it was an older gentleman who apparently was a trustee, by where he was sitting and what we was saying. the other was an atty. there were no one else in the room at the time when i heard this trustee say to the atty...i'm leaving and retiring shortly, why haven't you applied for my job! i could put in a good word for you, you'd be great at it. the atty just laughed and then a clerk, ( i have no idea where he was hiding! since i didn't see him at all when i peeked in), who i didn't know was there, called in all the people for that hearing room. (we were not in there). i wonder if he got the job???