Question Trustee is taking funds from a law suit?

[Arrowheadman]

Hi,
I would love to get some reliable information regarding this issue.
We filed chapter 7 in 10/09 and after filing the B/K discovered that I had a case against a former employer for wrongful termination.
We settled with my employer in July 2011 and during the settlement agreement we got a verbal from the trustee that they would be happy with a certain dollar amount, we all seemed satisfied with the amount, however when it came time to actually ratify the settlement an attorney for the trustee stated that there was no way he would accept the amount and my guy negotiated a new figure, which was very close to the amount of claims against us... The kicker now is that during the B/K we surrendered a note we were carrying from the sale of a property which is valued at over $100K. My question is Should the court be able to keep the note on the property or should we be asking for it back?
Thanks for your time and please get back to me if you need any more details.

[tobee43]

apparently you were an asset 7. these trustees will grab what they can. however, it doesn't mean you can't attempt to negotiate with them.

if you got a "verbal" from the trustee, usuall, hopefully those secessions are taped and or there is withness to that agreement.

what does your atty say?

oh!! and welcome to the board Arrowheadman

[Arrowheadman]

Confused

Thanks for the welcome tobee,
Given that we have already handed them the money, isn't it to late now? Also when the attorney filed the creditor claims form it included claims from our primary residence mortgage holder and I was under the assumption that they had no claim once they had taken the property back? how wrong am I?
Do you think it would be worth having a B/K specialist attorney try and negotiate with the trustee to try and get the note back? My wrongful term attorney was clueless in regard to B/K, so he's no help at all.
oh!! and welcome to the board Arrowheadman[/QUOTE]

[tobee43]

I'm sorry, i didn't understand you already handed over the money to the trustee. it will near impossible to get it back. i'm a bit confused because was the note for 100k in lieu of the settlement amount, or is the trustee wanted and both?

if you are asking if the trustee will give you back the note for 100k since you have now given them more money, you most likely will need an atty to intervene on your behalf. i'm a bit confused as to why you would have handed over any payment in question after already handing over the note. may i inquire why?

[Arrowheadman]

When we filed the B/K we were carrying a note on a property we sold, which had a balloon payment of approx $100K due in 3 years from now. The total claims against us were in excess of $200K if you include our foreclosed prop, the mortgage company claims a default of $93K which I don't understand since the prop is still currently for sale?
The trustee would not release or sign off on my settlement until they were paid, so my attorney negotiated with them for the $90K which I now realize was a mistake!

[BKAttyMI]

You need to speak to your bankruptcy attorney who would know what is going on and what is acceptable in your jurisdiction.

[HHM]

These are both non-exempt assets, they are both toast in a BK. There was no scenario in which you would have kept either.

Asset 1, damages from wrongful termination
Asset 2, a note payable on a rental property.

Neither asset, baring some sort of exemption was going to stay yours in the BK.

It sounds like the initial asset was the note payable, for a situation like that, because there is uncertainty in whether the note will ever mature and it takes so long too mature, you would negotiate with the trustee an amount to pay (a present value) into the BK estate as a way to buy back the note. However, the funds for the buy back cannot come from another non-exempt asset for which the trustee would take anyway. So, I think the confusion lies in that you "thought" you were turning over the wrongful termination award as a way to buy back the note payable, that assumption is a mistake.

[tobee43]

i'm glad a couple of atty's chimed in for you to give you some direction and their thoughts.
hhm sounds spot on here. but, again, i would contact the atty that handled your bk. and, best of luck to you!