Still worried

[fltoo]

How many years of tax returns did you actually have to show the Trustee?
Not your lawyer, but the actual Trustee at the 341 or during the 60 days after.
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I am also confused about what the Trustee is given beforehand, since I have never seen the BK paperwork. Do they just see the BK paperwork that you fill out or does your attorney give them copies of tax returns and bank statements?

My lawyer says no worry, just wait out the two years for a so called fraudulent transfer that I made. When they ask if I have made any pref payments or fraudulent transfers in the past two years, I can honestly say no. Two years tax returns for me is okay but if I have to show the third, the large amount of income on the return will cause a red flag.

Even though the look back is two years, they can, at their discretion look back further.

[BKParalegal]

When a BK is filed, the Trustee receives the petition electronically. The Bk Attorney then emails the 2007 tax return and last 60 days of pay stubs. Some trustees want the alst 3 months of bank statements, some trustees do not. Some trustees view the petition prior to the hearing, some do not. All trustees look for the same thing. ANy assets over the exemption limits, any preferential payments, any transfers or assignments, any business that may have liquidatable assets(rare). That's it. A trustee(Chapter 7) never asks for cc statements or similar crap. It does them no good, that is a job for the cc companies to fight about.

Good Luck

[fltoo]

Thanks BK, I was hoping you personally would respond.

So, how do they pick up pref payments and fraudulent transfers? From the questions you answer on the paperwork?

So, if someone lies on the paperwork, the Trustee won't know? Seems very haphazard to me.

[BKParalegal]

They look at the questions you answered in the SOFA(Statement of Financial Affairs) and you are signing documents submitted into FEDERAL COURT that you are telling the truth. If they discover illegal transfers of property, I guarantee, and this is not a might happen, this is a guarantee, you go to prison. I have never had a client go, but I have been around others that went to the Federal Pen. And I can guarantee, all those people that lied on their BK, got caught, and went to prison, are not waking up every morning and saying "Man, lieing on my petition was best the idea I have had all year!!"

[Lajazz947]

When a BK is filed, the Trustee receives the petition electronically. The Bk Attorney then emails the 2007 tax return and last 60 days of pay stubs. Some trustees want the alst 3 months of bank statements, some trustees do not. Some trustees view the petition prior to the hearing, some do not. All trustees look for the same thing. ANy assets over the exemption limits, any preferential payments, any transfers or assignments, any business that may have liquidatable assets(rare). That's it. A trustee(Chapter 7) never asks for cc statements or similar crap. It does them no good, that is a job for the cc companies to fight about.

Good Luck

Hi Paralegal,

Don't want to highjack a thread so excuse me if I step on anyone here.

I am a general partner in a real estate fund that has been in operation one year. We have done great for investors but liquidation value to me as a genral partner is nil right now.

My attorney was pointing out that it might be an issue. I am checking to see if there is a non alienation clause somewhere that might protect me.

You wrote that it is rare to find liquidable or sale-able business assets. Would you comment on my situation?

FYi I am in the central California district if that makes any difference.

Thanks

[BKParalegal]

Look at your situation from a Trustee's standpoint. Can they step into your shoes, and are there assets, when sold and after paying all related costs and liabilities of the company will show a net profit? Or is your portion of ownership of the fund have any value in the open market, or is it something that is only valuable to the other partners and what would they be willing to buy your share for? Remember a trustee, makes his money by liquidating assets and keeping 25% and then the rest is distributed to creditors. But if a trustees steps into taking an asset, be it a piece of property or a business, they have to satisfy all debts attached or related to the business just as if you never filed BK and sold it yourself. So, typically there is not much for the trustee to take, but you will know better than me or them.

Good Luck

[Lajazz947]

Look at your situation from a Trustee's standpoint. Can they step into your shoes, and are there assets, when sold and after paying all related costs and liabilities of the company will show a net profit? Or is your portion of ownership of the fund have any value in the open market, or is it something that is only valuable to the other partners and what would they be willing to buy your share for? Remember a trustee, makes his money by liquidating assets and keeping 25% and then the rest is distributed to creditors. But if a trustees steps into taking an asset, be it a piece of property or a business, they have to satisfy all debts attached or related to the business just as if you never filed BK and sold it yourself. So, typically there is not much for the trustee to take, but you will know better than me or them.

Good Luck

Perfect answer. There is no way that right now the LP is worth much to anyone other than on a future value basis.

We hold several properties, spinning off good cash flow which is paid to investors and expenses of the fund. In 1 year we have as General Partner's taken a mere $5000 each in December 2007.

I am going to provide my attorney with as much info as possible but I think that it is a safe here.

Thanks so much.

[BKParalegal]

A trick some Trustee's pull if they see future value, is they will let you get your discharge, but they won;t file their No Asset Report. A smart BK Attorney will file a Motion to Abandon and compel the Trustee to put up or shut up based on the value or lack there of at the time of filing.

Good Luck

[Lajazz947]

Great, thanks again so much.

[fltoo]

Thanks BK, for explaining the process to me. Since I can honestly fill out the paperwork, I should be okay.