Couple of question about a filed case.

[GettingGoing]

I have filed my case and am about 30 days away from my 341. Today we received a copy of a letter letter from the creditor that was garnishing my wifes wages that instructed her employer to "return all garnished money to the US trustee." She talked to payroll the other day and they said that as soon as they heard from the creditor that we filed bk that they would issue her a check for all the money. Do they now have to follow the creditors instructions and turn it into the trustee? If so do I need to amend my filing and exempt that money? We have plenty of exemption room so that wont be a problem.

Just for clarification with the student loans on sch I we have about 30/month left after expenses. On the means test we are about $30,000 under median for our family size however current income we are only about $10,000 under.


Secondly, I am worried about our schedule J and what the trustee may want to force us to convert to a ch13 by forcing us to have our student loans put into forbearance which would free up about $400/ month. Should I know prior to the 341 meeting if she has issue with this or will it just be thrown at us at our 341. What are my options if she does? Can I amend schedule J? There will be a new addition to the family in about 6 months so could I add much needed life insurance for the wife and I or is that a no-no since it was done post petition? I wish we could have waited to file until the new baby is here because being a household of 4 would leave us with very low money left even if the student loan loan payments are thrown out. I will also be losing unemployment benefits within the next 6-8 months which will put us way into the negative every month. Is this the kind of thing the trustee is lookinig for on schedule I question 17 and will it make a difference in what the trustee says?


Thanks to anyone that takes the time to read all of this and give advice. I don't know what I would do without this site. My case seemed like an easy one so I thought it would not be a problem filing pro se but I regret it greatly now. The nolo book walked me through every blank in the forms but it no replacement for the real life experience that an attorney would have been able to give me.

[tigergem]

You should annotate any major changes that you are anticipating within the first few months of your plan. Yes, you can expect these matters to come up for discussion at the 341. For example, at the time I filed (beginning of December), I had a secondary, (although exempt), source of income that I knew was going to be stopping the middle of January. I annotated this fact and was also able to provide documentation to that effect. So this amount was not factored into my plan repayment from the onset and met with no objection on the part of the trustee. He asked about it just to make sure he understood... that was it. But... I am also specifically ordered to modify my budget within 30 days if I get a job.

Between the time of my filing and my 341, there were other minor "life changes" to my budget, and when these were discussed at my 341, I had to amend my schedules. (A decrease in my cell phone bill, an increase in my health insurance premium...that kind of stuff...)

So between the time of my 341 and the confirmation hearing, I had to amend my budget and expense schedules. I also had to add a creditor that crawled out of the woodwork and requested notices, even though they were not initially on my Schedule F because I had completely forgotten they existed.

[GettingGoing]

You should annotate any major changes that you are anticipating within the first few months of your plan. Yes, you can expect these matters to come up for discussion at the 341. For example, at the time I filed (beginning of December), I had a secondary, (although exempt), source of income that I knew was going to be stopping the middle of January. I annotated this fact and was also able to provide documentation to that effect. So this amount was not factored into my plan repayment from the onset and met with no objection on the part of the trustee. He asked about it just to make sure he understood... that was it. But... I am also specifically ordered to modify my budget within 30 days if I get a job.

Between the time of my filing and my 341, there were other minor "life changes" to my budget, and when these were discussed at my 341, I had to amend my schedules. (A decrease in my cell phone bill, an increase in my health insurance premium...that kind of stuff...)

So between the time of my 341 and the confirmation hearing, I had to amend my budget and expense schedules. I also had to add a creditor that crawled out of the woodwork and requested notices, even though they were not initially on my Schedule F because I had completely forgotten they existed.

Thanks for the response however I have filed a ch7 bk and hope that I am not pushed into a ch13. The questions on schedule I and J that asked about expected changes in income and expenses both said within the next 12 months.

[tigergem]

Right, I know what Schedules I and J are. You asked about the unemployment stopping in 6 - 8 months and the new baby and annotating the possible changes....

I'm telling you YES, annotate them.

Also to anticipate that the trustee might request amendments to the schedules at or after your 341.

[justbroke]

Do they now have to follow the creditors instructions and turn it into the trustee? If so do I need to amend my filing and exempt that money? We have plenty of exemption room so that wont be a problem.

I think I wrote about this before, but it may not have been to you. Any pre-petition garnishment, which hasn't been paid to the creditor, does need to go to the Trustee. That money is already "garnished" although the employer hasn't paid it yet. At least, that's my read. The Trustee would then declare an asset case and disburse the funds to the creditors that file a claim.

Just for clarification with the student loans on sch I we have about 30/month left after expenses. On the means test we are about $30,000 under median for our family size however current income we are only about $10,000 under.

Well, you'll have to see if the United States Trustee overlooks the student loans on Schedule J. Also, if you have over $100K in unsecured debt, the UST will probably take interest in your case and take a closer forensic look at your schedules.

Secondly, I am worried about our schedule J and what the trustee may want to force us to convert to a ch13 by forcing us to have our student loans put into forbearance which would free up about $400/ month. Should I know prior to the 341 meeting if she has issue with this or will it just be thrown at us at our 341.

Generally, you'll know before, during or right after the 341 Meeting. If the UST shows up at your 341 Meeting, that's a very good indication that they became "interested" in your case and will be performing a close examination of your petition. They will usually show up at the 341 Meeting if they are interested, but that's not fatal to any future motion to dismiss.

What are my options if she does? Can I amend schedule J?

Dismiss or convert to Chapter 13.

There will be a new addition to the family in about 6 months so could I add much needed life insurance for the wife and I or is that a no-no since it was done post petition?

Even if you're pregnant with a child, that is not a child for purposes of the petition, since your estate is created the day you filed the petition. Whether the Trustee allows you to pad numbers with values that you don't even know what they are now... could be problematic.

Is this the kind of thing the trustee is lookinig for on schedule I question 17 and will it make a difference in what the trustee says?

Generally speaking, the Trustee looks to line 17 if you took some liberty with some of the numbers (e.g. you "guessed" at the number because you're unsure. For example, you surrender a property, but you don't know the true impact on your personal income taxes, since you won't have the interest deduction on IRS-1040 Schedule A). Whether your Trustee will let you look 6 months forward with respect to an unborn child... I just can't tell you.

[GettingGoing]

I think I wrote about this before, but it may not have been to you. Any pre-petition garnishment, which hasn't been paid to the creditor, does need to go to the Trustee. That money is already "garnished" although the employer hasn't paid it yet. At least, that's my read. The Trustee would then declare an asset case and disburse the funds to the creditors that file a claim.

Well, you'll have to see if the United States Trustee overlooks the student loans on Schedule J. Also, if you have over $100K in unsecured debt, the UST will probably take interest in your case and take a closer forensic look at your schedules.

Generally, you'll know before, during or right after the 341 Meeting. If the UST shows up at your 341 Meeting, that's a very good indication that they became "interested" in your case and will be performing a close examination of your petition. They will usually show up at the 341 Meeting if they are interested, but that's not fatal to any future motion to dismiss.

Dismiss or convert to Chapter 13.

Even if you're pregnant with a child, that is not a child for purposes of the petition, since your estate is created the day you filed the petition. Whether the Trustee allows you to pad numbers with values that you don't even know what they are now... could be problematic.

Generally speaking, the Trustee looks to line 17 if you took some liberty with some of the numbers (e.g. you "guessed" at the number because you're unsure. For example, you surrender a property, but you don't know the true impact on your personal income taxes, since you won't have the interest deduction on IRS-1040 Schedule A). Whether your Trustee will let you look 6 months forward with respect to an unborn child... I just can't tell you.

Thank you again for your input. With student loans($50k) included we have about $105k in unsecured debt so I guess the US trustee will take interest in our case. I guess I will just have to wait and see how things go.

If the trustee turns my case into an asset case is this going to be a big problem? The garnished $400 would be the only asset because everything else is exempt.


On a positive note I did some research on the trustee assigned to our case and she likes to ride dirt bikes, play softball and other youthful activities. Maybe she will be laid back and understanding.

[justbroke]

If the trustee turns my case into an asset case is this going to be a big problem? The garnished $400 would be the only asset because everything else is exempt.

I don't know if the Trustee will care to create an asset case just for $400, but you never know. The Trustee would get $100 of it, with $300 being split amongst all the other (unsecured) creditors.

[GettingGoing]

I don't know if the Trustee will care to create an asset case just for $400, but you never know. The Trustee would get $100 of it, with $300 being split amongst all the other (unsecured) creditors.

Ok, I am not all that concerned with the money as much as I am concerned that the money will complicate my case. The trustee can do whatever she wants with it. Thanks again for your helpful insight. Question if you don't mind, why was your ch7 case turned into a ch13 case?

[justbroke]

Ok, I am not all that concerned with the money as much as I am concerned that the money will complicate my case. The trustee can do whatever she wants with it. Thanks again for your helpful insight. Question if you don't mind, why was your ch7 case turned into a ch13 case?

Being an "asset" case doesn't complicate your discharge -- which is what you are really doing this for. As an asset case, in which the Trustee is not recovering any money or property from you, just delays your closing. It doesn't even affect you since the Trustee isn't recovering anything from you personally.

My Chapter 13 case was converted to a Chapter 7 case.

[GettingGoing]

Being an "asset" case doesn't complicate your discharge -- which is what you are really doing this for. As an asset case, in which the Trustee is not recovering any money or property from you, just delays your closing. It doesn't even affect you since the Trustee isn't recovering anything from you personally.

My Chapter 13 case was converted to a Chapter 7 case.

Ok thats good to hear however my wife just talked to her payroll department and they said they are putting the money into her next check in 2 weeks. Should I send this to the trustee or just wait for the trustee to request it? Is this now an asset? Thanks again justbroke. I really feel like I am 20 questioning you.

[justbroke]

I can't tell you if the Trustee will consider it an asset. When you get it, set it aside and don't touch it. If the Trustee never asks for it, then they don't want it.