Trustee Objection to Exemptions

[tobee43]

your parents sister will have first rights on buying out this property. or should. someone should have advised her

i hate to say this i really do, but unfortunately, going through something similar ourselves we had the other owners PRIOR to our filing hire an atty and do the buy out prior to our filing...actually a few years before. i actually had to list in on our petition the deed transfer and why.

i'm really sorry for your poor parents and your aunt. it's so much to go through. hopefully, your aunt will be able to buy out the trustee.

[BobMango]

This thread is starting to be like weather around here -- don't like it? -just wait 15 minutes.

So as it turns out, when the property my mother and her sister jointly owned was refinanced 5+ years ago, they took my mother off the title as well ( I guess she forgot), so she has no ownership interest in the property. Given that this transfer took place so long ago (5+ years) I don't think the trustee will have grounds to contest it.

Bottom line (for now) is that it looks like filing the ammendments to correct the exemption amounts should be all that needs to happen at this point and the case should get moved back to a no-asset.

Just a cautionary note to others considering a Pro Se filing, I had strongly advised my mother to consult with a few attorneys before she filed, but.... A lot of stress could have been avoided as I assume a competent attorney would have looked at the ownership situation before filing and avoided the roller coaster.

[justbroke]

I always suggest that if there is anything more than a cheap old car worth almost nothing, some pots and pans, and the clothes on your back, then you should hire an attorney. Too many people get caught up on assets! Trying to interpret the exemptions (non-bankruptcy, federal, State) can be a daunting task.

Hopefully, the amended schedules will help the other issue and the Trustee will then see the light with respect to the property transfer.

[tobee43]

This thread is starting to be like weather around here -- don't like it? -just wait 15 minutes.

So as it turns out, when the property my mother and her sister jointly owned was refinanced 5+ years ago, they took my mother off the title as well ( I guess she forgot), so she has no ownership interest in the property. Given that this transfer took place so long ago (5+ years) I don't think the trustee will have grounds to contest it.

Bottom line (for now) is that it looks like filing the ammendments to correct the exemption amounts should be all that needs to happen at this point and the case should get moved back to a no-asset.

Just a cautionary note to others considering a Pro Se filing, I had strongly advised my mother to consult with a few attorneys before she filed, but.... A lot of stress could have been avoided as I assume a competent attorney would have looked at the ownership situation before filing and avoided the roller coaster.

i think on our petition it was 3 years (that may vary state to state), and we were shy about 2 months when we filed. i had to be honest and list it. even advised by our atty not to, but i did. we were indeed asked about the transfer of property by the trustee, however, once explained we had no problems at all. our property was also owned with another family member, it was even free and clear at the time of our341. so basically at that point with no mortgage it is an asset and could have been forced to be sold had we not transferred it years back. the trustee said there is not enough money in your half for us to pursue this out of state property is what she exactly said. wheeeeeeeew.

i think in the case of your mom and aunt since the place was refi'ed 5 years ago, and has an amount owning on it is GREAT LOL!! this way the trustee would have to pay the mortgage off first then give your aunt half of the proceeds and most likely there would be nothing left or too little to pursue.

i think i am a smartbutt...as you most likely know by now LOL!! however, never would i dream of going this alone. i'm not as brave as justbroke, (actually jb is brilliant i'm sure in "real" life" as well as on this board). however, even with a legal background i'm chicken!

[BobMango]

Thanks tobee, pretty similar situation I think, except in this case it looks like the trustee was trying to avoid the lien altogether. I guess he was thinking was that my mother was on the title when it was refinanced. What they actually did was file a quit claim to get my Mom off the title, then her sister refinanced it alone. My (limited) understanding is that if they had refinanced it while she was on the title without putting her on the mortgage then the lien might have been invalid.

Apparently this trustee is the newest one in the district, perhaps being a little more vigorous than a more seasoned trustee might be in such a case. Thing is he really didn't ask any questions about that property. When my Mom asked him if he would order WF to release their account his response was, "I may keep that money, that is MY decision!" Luck of the draw I guess.

[justbroke]

I don't like the young "unseasoned" trustees. Having wrote that, they typically learn their lesson the hard way, waste of the $60 (or so) that they get for a no-asset case, that speculation typically does not pay.

Best wishes.

[BobMango]

So now after consulting with several attorneys who did not know what they were talking about, my parents continued pro se and filed an amended petition to address a couple of assets they overlooked and to protect their tax refund and their share of the future rental income from the jointly owned property. Yesterday was the deadline for objecting to exemptions on the amended petition and nothing from the trustee. Last time the trustee filed his objection two days before the deadline and it was an incoherent mess. I've checked PACER and still nothing this time; I know some things can be filed with the court and not hit PACER until the next day, so they may not be totally in the clear, but the odds are looking better I think.

My understanding is that if the trustee does not make a timely objection then the exemptions will stand regardless. This would mean they are no longer an asset case and the trustee should issue a report of no distribution and return their bank account, right?. What are the next steps provided that there has not been a timely objection filed? Should my parents file a motion with the court to compel the trustee to turn over the $8K he has from Wells Fargo, or should they let more time pass before they start trying to get their money back?

Thanks.

[justbroke]

Personally, I would wait a day or two, then contact the Trustee about turnover of the property. If the Trustee refuses, file the Motion to Compel Turnover.

As for the objections... if the Trustee does file a "late" Object to Claim of Exemption, then you would counter with an Object and show that it was not timely filed. However, you mention that there was a Prior Objection and that you hope that you satisfied the objection through the amended schedules. Again I would contact the Trustee to see what's going on. IF there is no movement with the Trustee, you may need to schedule a hearing on the prior Objection to Claim of Exemption. (Schedule by calling case manager and asking to have a hearing on the objection to claim of exemption.)

It's all procedure at this point.

[BobMango]

Thanks jb, I guess my assumption was that the amended petition would basically take care of the previous objections since the amended forms addressed those exemptions that had previously been claimed and the 30 day clock got restarted. My parents did file a response to the trustee's objections at the same time they filed the amendments, but no hearing has been scheduled from that round. I'll suggest they call the trustee next week to see about turnover of the property and it may become clear if there is some unfinished business with the first round of objections.

[BobMango]

After an inquiry to the trustee regarding his intentions on the case it appears he would like to meet with my parents. My expectation is that this will be a session where the trustee says something like, "Because you messed up your initial filing I incurred $XXX costs. Let me keep $XXX and I'll drop the objection and abandon your property."

I suppose the purpose could also be for the trustee to get a better sense of what's really involved before he makes any additional decisions, but I'm skeptical of that potentiality.

Since the amendments were filed and no objections entered, my understanding is that any of the exemptions claimed should be good to go. There may still be some negotiating on the previous objections, but I'm a little unclear on what might happen since amendments were filed after those objections, with no hearing on those objections and no amended objections or additional objections to the amended filing. I would think the trustee would be time-barred from action against those newly claimed or amended exemptions, but that doesn't mean there won't be a fight.

When they meet with the trustee my parents will have a market analysis of the rental property with them showing there is no unencumbered value there. They have also prepared a motion to compel the trustee to abandon the property and return the bank funds. The local rules require contacting the other party to ascertain whether they will oppose or concur with the motion before filing, so depending on how the meeting goes they will decide whether to present the motion for concurrence or just settle with the trustee. Mainly it will depend on how much the trustee asks for, if he wants to settle. If he's still fishing then they may just proceed with the motion.

[justbroke]

Wow. Yes, ti is getting more interesting and I think I agree with you. I agree that the Trustee may be trying to gauge whether the "fight" is worth it and may attempt to negotiate his/her way out of this mess.

[tobee43]

double wow, as i was reading BobMango's last entry i just kept saying wow, i can't believe this trustee. i'm so sorry this is all happening to you.

[BobMango]

A little quiet on the board today.

Figured I'd provide a little update. The meeting with the trustee is tomorrow morning. My Mom had asked the trustees' para-legal if they needed to bring anything or if there was an agenda for the meeting. They said no. In the meantime they did get a market appraisal that shows the rental property is still underwater and have prepared a motion to compel the trustee to abandon the real property and return the bank funds that Wells Fargo sent to the trustee.

As I try to imagine the various scenarios that could play out, the trustee looking for a settlement seems the most likely. If he was going to seize the property there is really no reason to meet with my parents and likewise if he was just going to drop it. Since he is not asking for any additional information or documentation I can't see that he's looking to investigate anything else at this time. That really only leaves seeking a settlement as the logical reason for the meeting.

I think my folks have done the necessary homework and are ready for any of the scenarios that we could imagine, but we'll have to see what happens tomorrow. Keep your fingers crossed.

[justbroke]

I wish them the best. (And yes, it has been so very quiet here today!)

[BobMango]

SUCCESS!

The meeting with the trustee started rough. He had out his legal pad and was walking them through all of the assets he was going to take; tax refund, future rents, bank accounts, etc. My parents just listened and waited. Then my mother said, "but we exempted all of that in our amended petition and you didn't object within the allowed time frame." The trustee looks through his papers, punches up something on his computer and says "I screwed myself."

He then indicated that he would send a check for the bank funds by the end of the week and abandon all other assets. They should have their discharge shortly. On the way out he asked where they got their advice. My mother indicated that she had consulted a couple of attorneys and followed their suggestions. In the end they paid one consult fee ($200) and then the filing fees, etc, so filing pro se saved them probably $1500 in cash, but they certainly paid for it in worry over the past four months.

It looks like the trustee really wasn't paying attention to the case, he had all the assets from their amended petition, but apparently didn't really look as the amended exemptions. The one attorney my folks consulted indicated that this trustee had only been appointed about six months ago, so in some ways that was a blessing and a curse. Perhaps a more experienced trustee would not have viewed this as an asset case to begin with, but then a more experience trustee may have paid closer attention and made the resolution much longer and harder.