Is this BK Hell??!!

[SinkingFast]

We have a friend who filed BK as a result of going thru Divorce.

They hadn't reached the Division of Assets point when the gal had to file BK. She was being sued by a Creditor.

At her 341 Meeting the end of August, the Trustee questioned our friend about what she expected to receive in the property settlement. GF was truthful. She told the Trustee she and STBX had decided he would keep the house and give her money from his 401K fund.

The Trustee immediately filed a Continuance of the Meeting of the Creditors. The first Continuance expired in September.

About 2 weeks after the 341, GF had her division of Assets meeting. GF informed her BK attny of the property settlement they'd agreed upon. GF's attny then filed amended Schedules to reflect the changes.

The Trustee filed another Continuance which expired in October and another Continuance which expired earlier this week. The Trustee has filed yet another Continuance due to expire in December.

Today, on PACER, this Form shows up. Trustee's Form #1, INDIVIDUAL ESTATE PROPERTY RECORD AND REPORT ASSET CASES.

The Trustee went thru and listed all property listed in GF's schedules and the Exemptions. Then there's some notes about the 401K money, and Amended Schedules, and such.

Major Activities Affecting Case Closing:
OBJECT TO EXEMPTIONS: D12 FOR HUS'S RET!!!! DO THIS IN 12/07, AFTER RESPONSE AND DOCS. ((I'm guessing Hus's means Husband's??))

DIVORCE CLAIM $XXXX (The 401K monies)
CLAIM LT 08/07 cw NO RESPONSE LT TO CLAIMS ATTY 09/07 cw ^R RESPONSE. $XXXX COMING!!. EM TO HIM RE: 11 USC 542. em to da re: exemption claimed. 10/31/07 MM.. LT TO DIV ATTY. 11/07


Lastly, there's a couple of additional dates.

Initial Projected Date Of Final Report (TFR): July 5, 2008

Current Projected Date Of Final Report (TFR): July 5, 2008

Does this mean the Trustee intends to tie GF's case up until July of next year??!!

[Minnymouth]

OH YEAH,

And he plans on getting money out of the divorce settlement TOO................ any and all he can............

This is one reason why its so important to get divorce first, bankruptcy second..............

I'm aware that some settlements are untouchable..... but I don't know about divorce settlements....... seems like that would be clear cash the Trustee could seize.........

I sure hope not, for her sake. She may walk away with nothing from the divorce and have to pay all the bills out of her settlement.....

Keep us posted.

[SinkingFast]

GF said when the Trustee commented at the 341 she was gonna go after the 401K money, GF's attny just rolled her eyes.

After GF told me what happened at her 341, I enlisted Lrprn,......... Search Guru Extraordinaire of the BK Forum,.......... To help me find out if the 401K monies could be protected.

Lrprn and I found probably a half dozen Decisions where the BK Court protected 401K monies awarded as result of a Post Petition property Settlement. I sent those cases to GF. GF turned around and sent those cases on to her attny.

But I'm wondering,............ Is GF looking at being hog tied by the Trustee until summer next year?? Is that what this is about??

What can be done to stop it??

I've read we, as Debtor/Filers, are entitled to swift justice. That the Debtor/Filer can file some sort of Motion to stop the Continuances. That forces the issue to be heard by the BK Judge who can then tell the Trustee where to get off.

[Minnymouth]

Yes, I believe that the debtor can file a Motion to Stop Continuency...... stating abuse by the Thrustee as a reason. He keep extending it, waiting on funds, and divorce settlement.....

Does she have an attorney? They really need to do some reseach on this and her attorney should KNOW how these 401K settlement funds should affect her bankruptcy......

In fact, that should have priority one with her attorney when she filed........ or did it come up afterwards???

Tell her to research, research, research..... protect herself, cause her attorney MAY NOT......

Keep us posted.....

[SinkingFast]

Update,..............

GF's Trustee sent GF's Divorce attny a letter ordering he turn over the 401K funds awarded in the Divorce Settlement to her. The Trustee.

The Trustee intends to hold the funds in a special acct until such time as the BK Judge determines the disposition of the funds.

According to ERISA guidelines the Divorce attny can't turn over anything. Only the primary or a beneficiary can order the surrender of 401K funds.

The only person who's a beneficiary to the STBX's 401K is GF. Since the Divorce is not finalized, GF is still the spouse of record. If she were not living, then their children would become the beneficiaries.

Since the only persons who can do anything with 401K funds is the primary or a beneficiary, GF's Divorce and BK attnys are powerless to turn over anything to the Trustee.

Plus the funds have yet to be distributed. Even tho the property settlement hearing was held, the Division of Assets paperwork has not been signed. There is no Divorce until that paperwork is signed.

What is this Trustee thinking??

[lrprn]

What is this Trustee thinking??

Methinks the glare of seemingly easy $$$ have blinded ye old trustee to the realities of 401Ks.

How is it that so often those that have suffered the most and deserve the fairness of the law (your GF and Minny come to mind) get the absolute worst trustees? And filers who skirt the law, hide assets, lie on their forms, etc all too often get trustees who are either incompetent or so near retirement they don't care? Sometimes there's truly no justice for the innocent.

[SinkingFast]

[Minnymouth]

INTERESTING, VERY INTERESTING..........

Yep, those Trustee's see $$$$$$$$$........ in fact some are just plain ole "blinded" by them....