Chapter 7 Gone Horribly Wrong

[SallyX]

What is the name of your state? FL
I filed Chapter 7, and had my 341 in August. It didn’t go well. The Trustee had a lot of questions which I answered as honestly as I could. There is nothing fraudulent in my filing. But, she seems to think otherwise, apparently. I was represented by an attorney.
One month after the 341, she requested and was granted a thirty day extension to further review my case. A few days ago I received a letter in the mail titled Notice of Rule 2004 Examination. It certainly sounds ominous.
I have been instructed to appear at this meeting with a load of documents and information. For example, tax returns for the past four years; statements of financial condition for the past four years; any and all property interests for the past four years; all documents reflecting ownership in furniture, appliances, silverware, etc for the past four years; and on and on.
Obviously, the Trustee and her counsel are going to examine me and my background to see if I am hiding anything. My concerns and questions are numerous.
1) I no longer have an attorney to represent me. He wants additional money to represent me, (don’t blame him), but I simply do not have it. So, I’m going it alone now. How bad is this and can I have counsel appointed to me?
2) The Trustee who is handling my case is also a bankruptcy attorney. She is one of three attorneys I spoke with and interviewed prior to my filing Chapter 7. I ended up not selecting her because she was expensive. I’m wondering if I might make a claim for some sort of conflict of interest because of our previous conversation. It was a ten or twelve minute telephone conversation. If so, how is this done?
3) If I do successfully have this Trustee removed, what happens at that point? Am I assigned to another to begin the process anew? Or, does he just take her files and resume where she left off?
4) Can I just withdraw my filing and refile in six months and hope for a better outcome?

Any advice is very welcome. Thank you.

 

[Ladynred]

Ouch.. this is a rough one

The problem is that you're in FL and the exemption levels, other than 100% homestead, are pathetic. Getting everything you own in under that $1000 limit ... yikes.

Obviously, the Trustee is digging for anything over that paltry $1000, and for whatever reason, she thinks you have more.

All documents reflecting ownership of furniture, appliances and silverware ?? I don't know many people who keep all the reciepts for all their purchase for a year, let alone 4. Produce what you can, obviously, but if you don't have it.. well.. you don't have it and the Trustee can't persecute you for that. Adequate records for taxes, etc. is one thing.. keeping years of purchase receipts for anything and everything .. not at the top of even the IRS's list !

1 - Yes, you can do it yourself, but its not county or state court, they won't appoint an attorney for you. So.. if you must do it alone, be super organized, know EXACTLY what you have and don't hesitate over anything.

2 - Don't know about the conflict of interest angle. Many lawyers are Trustees and likely do end up facing filers who did NOT choose them as their lawyers. A 10-12 minute phone conversation probably didn't even make much of an impression on her. If you're really worried about it, call the State Bar Assn and ask or call the US Dept of Justice, they govern Trustees.

3 - Don't know.. you'll have to answer # 2 first...

4 - If you do a voluntary dismissal , you may have to wait another year before you can refile. The problem is you could end up facing the very same Trustee.

If you truly have nothing to hide, then I'd just produce what you can of what she's demanding and show up at the hearing. That $1000 exemption is pretty chintzy.. so be sure of the values you placed on your belongings.

 

[SallyX]

Agreed that the exemptions in FL are rather tight, with the exception of the Homestead exemption.
What are the ramifications if I withdraw my filing? What assets become exposed to any unsecured creditors who have won a judgement?

 

[Ladynred]

The same exemptions you have for bankruptcy are applied in the case of a judgment .. same protections.. same exposure.

 

[anadude]

it's real simple, if you having nothing to hide comply with the trustee's request, you'll eventually get your discharge. if you have something to hide, then you screwed yourself by trying to hide something.

if your trustee is removed, the next one will most likely pick up where she left off. by you challenging this trustee for a possible conflict would only fuel the fire that you're hiding something.

 

[jross2]

The very first thing to be said here is if your exemptions are under the limit and you have not told any lies, you have nothing to worry about. The trustee is only doing her job, which on occasion requires her to test peoples petitions. Alot is going to depend on how much over the 1000$ limit you are with your personal property. If you are well over the limit, the trustee will negotiate a % with you to be paid in cash. If you are barely over the limit, the trustee will usually fold the hand and go away. If you are not much over, don't be afraid to call trustees bluff, tell them to come and get your stuff, sell it, and give you your 1000 and they can have the rest. Believe me, if there is no large profit to be made for trustee, they are not going to spend the money to have it taken away and auctioned off. My bankruptcy experience taught me that trustee is lots of bluster and little of substance when it comes to the little guy. By nature, they are bullies, and as in most bully cases, when confronted they will back off. However, the flip side is if you have anything of value, they are like sharks in the water that smell blood, and can be vicious. Good luck.