Filed Bankruptcy and then sold land to pay for it plus other costs

[Lucidious]

State is NC

Good afternoon, I'm needing some advice regarding a family member's case.

A bankruptcy was filed to have all dept paid off. This family member, after filing the bankruptcy, sold some land, which is now being paid towards the bankruptcy attorney plus the agreement that was made to get everything else paid off.

The issue we're faced with is that the trustee which is handling the payments regarding the land and bankruptcy. It's been two months since the bankruptcy was filed, and there's not been any movement regarding getting the funds sent where they're supposed to go, nor the additional funds sent to the family member, as there was going to be some leftover for them after everything else was paid off.

They've reached out to the lawyers who have stated that the trustee typically sends everything out the last two days of the month, yet to our knowledge from what they lawyers have stated, they haven't.


Is there anything negative that could come from reaching out to the trustee, bypassing communication with the lawyers? We're just wanting to find out when the funds are going to be sent over.

If you need any other info, please ask and I'll provide it to the best of my ability.

Thank you!

 

[zddoodah]

I'm needing some advice regarding a family member's case.

A bankruptcy was filed to have all [debt] paid off.

The issue we're faced with is. . . .

Please explain why this family member's BK case has anything to do with you. What is your relationship to this person? Also, am I correct in inferring that this is a Ch. 13 case?

It's been two months since the bankruptcy was filed, and there's not been any movement regarding getting the funds sent where they're supposed to go

If it's a Ch. 13 case, there isn't going to be payments made until the Ch. 13 plan is approved. Has the examination of the debtor occurred? Has the debtor submitted his/her plan for confirmation? It's still pretty early.

Is there anything negative that could come from reaching out to the trustee, bypassing communication with the lawyers?

If the debtor is represented by counsel, the trustee isn't going to communicate directly with the debtor.

 

[Lucidious]

Please explain why this family member's BK case has anything to do with you. What is your relationship to this person? Also, am I correct in inferring that this is a Ch. 13 case?

This case is for my mother, and she gave me the go ahead to make a post asking since she'd not ever really used a forum before. Also yes, it's a Ch. 13 case.

If it's a Ch. 13 case, there isn't going to be payments made until the Ch. 13 plan is approved. Has the examination of the debtor occurred? Has the debtor submitted his/her plan for confirmation? It's still pretty early.

The examination has been completed and the plan has been confirmed. From what the Lawyer has stated, everything is ready to go, it's all in the hands of the trustee to send out the funds, which she was originally told would've been in November, to then be told towards the end of November that the trustee sends out the funds on the last two days of the month, which has passed. She's getting increasingly anxious about this all being resolved so that the bankruptcy can be over with.

 

[quincy]

FreeAdvice has as a member of this forum a bankruptcy attorney. I have tagged “Despritfreya” to see if despritfreya can answer your questions and offer some help.

@despritfreya

 

[zddoodah]

The examination has been completed and the plan has been confirmed. From what the Lawyer has stated, everything is ready to go, it's all in the hands of the trustee to send out the funds, which she was originally told would've been in November, to then be told towards the end of November that the trustee sends out the funds on the last two days of the month, which has passed. She's getting increasingly anxious about this all being resolved so that the bankruptcy can be over with.

You said the case was filed only two months ago, so I assume that means early/mid-October. Having the exam and the plan approved so quickly is surprising, but maybe the Western/Middle/Eastern District of North Carolina isn't as swamped as most federal districts (and perhaps the trustee's office is busier than the court). In any event, without knowing the details of the land sale transaction and the Ch. 13 plan, there's not a whole lot anyone here will be able to tell you. Your mother's lawyer will be the best source of information.

 

[Lucidious]

You said the case was filed only two months ago, so I assume that means early/mid-October. Having the exam and the plan approved so quickly is surprising, but maybe the Western/Middle/Eastern District of North Carolina isn't as swamped as most federal districts (and perhaps the trustee's office is busier than the court). In any event, without knowing the details of the land sale transaction and the Ch. 13 plan, there's not a whole lot anyone here will be able to tell you. Your mother's lawyer will be the best source of information.

Sorry, I was partially incorrect in terms of filing.

The BK itself was filed around 6-8 months ago. The land being sold happened 2 months ago, and she was told by her attorney handling the BK that the funds made from the land being sold would go into the BK to pay all of it in one sitting, and then she'd take the rest. Her lawyer worked with the judge and trustee to get the exam and plan approved in a timely manner so that she can get it all squared away sooner rather than later. Mid November, her Lawyer had reached out and stated that everything was good to go and that it was approved, and that was when the timeframe of "End of November" was provided.

 

[zddoodah]

OK. At the end of the day, no one here can intelligently speak about how long this will take. In my experience, BK trustees move at their own pace, so even your mother's attorney may not have a great sense of when things will happen. Regardless, her lawyer is the only one who can intelligently answer her questions.

 

[adjusterjack]

You can check PACER to see the status of the BK case. Might tell you something.

Public Access to Court Electronic Records | PACER: Federal Court Records (uscourts.gov)

 

[despritfreya]

I was asked to look at this. From what I gather. . .

1. Mom filed Chapter 13.
2. Mom owned land at the time the case was filed.
3. Mom's Chapter 13 Plan was Confirmed (approved) by the Court.
4. Mom found a buyer for the land and, through her attorney, mom filed a Motion to Sell the land.
5. The net proceeds of the sale are sufficient to pay off the Chapter 13 Plan (maybe 100% of all allowed claims) and, even after paying off the Plan there will be excess proceeds to return to mom.
6. The sale closed and the net proceeds are in the hands of the Trustee.

It does take time for a Trustee to disburse funds being held. Yes, typically, payments are made at the end of the month, however, we are in the Holiday season therefore, it would not be unusual for there to be a delay in payment.

In my experience, money received in the beginning of the month is paid out at the end of the following month. Money received after the 15th of the month may end up being held past the following month. It just depends on the internal workings of the Trustee's office.

When will mom get her excess proceeds? Good question. She will either get the funds with the general disbursement to creditors of the sale proceeds or, the Trustee may wait until the creditors cash all of the checks sent out. Hopefully, payment to mom will be with the general disbursement.

Mom needs to be patient. The money will get to her.

Des.

 

[Lucidious]

You can check PACER to see the status of the BK case. Might tell you something.

Public Access to Court Electronic Records | PACER: Federal Court Records (uscourts.gov)

Thank you for the link, will definitely look into it!

I was asked to look at this. From what I gather. . .

1. Mom filed Chapter 13.
2. Mom owned land at the time the case was filed.
3. Mom's Chapter 13 Plan was Confirmed (approved) by the Court.
4. Mom found a buyer for the land and, through her attorney, mom filed a Motion to Sell the land.
5. The net proceeds of the sale are sufficient to pay off the Chapter 13 Plan (maybe 100% of all allowed claims) and, even after paying off the Plan there will be excess proceeds to return to mom.
6. The sale closed and the net proceeds are in the hands of the Trustee.

It does take time for a Trustee to disburse funds being held. Yes, typically, payments are made at the end of the month, however, we are in the Holiday season therefore, it would not be unusual for there to be a delay in payment.

In my experience, money received in the beginning of the month is paid out at the end of the following month. Money received after the 15th of the month may end up being held past the following month. It just depends on the internal workings of the Trustee's office.

When will mom get her excess proceeds? Good question. She will either get the funds with the general disbursement to creditors of the sale proceeds or, the Trustee may wait until the creditors cash all of the checks sent out. Hopefully, payment to mom will be with the general disbursement.

Mom needs to be patient. The money will get to her.

Des.

Everything that you gathered is correct. I had her come read your response herself and while still anxious, she's thankful to know that this lengthy process is 100% normal with how it's been going timeframe wise. It definitely made her feel a little more comfortable about the whole ordeal!