What to expect between the filing and the 341

[lorelei]

So, I filed my Ch. 7 on April 16 and I have my 341 scheduled for May 21. So far, so good.

But being the sort who likes to worry (I must, I always do), I'm wondering what to expect between now and then.

Most importantly, if my credit union decides to freeze my account, when would that happen? My fear is that I go to pay for something and - bam! - debit card no longer works.

I have a car loan through the credit union where I have my checking account. I'm kicking myself for that, but I was scared to try and open another checking account with my credit being so crappy. Hindsight - I wish I had at least tried, but it is what it is.

In my filing, I said I intended to reaffirm the car loan.

If they decide to freeze, when might that happen?

If another creditor decides to object, when would that happen? Before or after the 341? Are there warning signs to look for? (I did some rooting around PACER and sometimes I saw that a creditor entered a motion of appearance months before filing an AP)

Is there anything I can look for that would give me a hint what the trustee is thinking? Although, my trustee has been on more than 9,000 cases so I doubt I'm anything more than just a case number to her.

Also, why do some cases languish so long after discharge before being closed? I can see that sometimes it's an AP waiting to be cleared up, but other times there are no filings or objections and the thing just sits there as an active case for a year. I don't want that!

[btbeme]

Lets tackle these one at a time...

If the credit union is listed as a creditor (say, for a home or car loan, or a credit card), there is a great chance that they will not only freeze but possibly seize your account. However, if you do not owe them money, your account should be safe. This is Reason #1 to Not Bank Where You Owe Money if you plan to file Ch 7. Whether you reaffirm the loan or not, you will likely have a problem here, if only temporary. I suggest that you do everything possible - NOW - to pull funds and redirect any direct deposits into a new checking account elsewhere.

They usually freeze accounts and access as soon as they receive the notice of filing from the Court. That they have not yet frozen the account puzzles me - maybe they are simply being ultra-kind, or maybe they haven't yet received the notice... Dunno. But staying at a bank that you list as a creditor is a very risky proposition no matter what.

As for an objection, that usually happens in two cases. One, if you used that credit line within 90 days before filing on a fairly large purchase. In that case, you might be liable for that portion charged. Second would be a local creditor who would try to take the effort to derail your filing. This rarely happens, and the creditors who might actually show up often know that they have NO CHANCE to get the Trustee to toss the file. Usually it is simply a way to show up and chew you out for defaulting. Like I said, very very rare, and more of an amusement than anything else.

As for the Trustee, well, that depends on your file. Lots and lost of posts here on how to make sure that your filing is innocuous and does not warrant special attention. That is the best way to fly a Ch 7, because trying to read a Trustee's mind is frustrating, and you can't do anything more than prep your case and present it as best you can.

Closing depends on a number of circumstances. It can take some jurisdictions a year or even two to close a case after discharge, and for nothing more than they simply don't get to it. After some time goes by, you might be able to call the court and see if it is closed - that sometimes prompts them to close the file right then and there. But, again, little you can do sometimes but wait.


Now, I painted with some very broad strokes here. There are always exceptions to the rules; however, I listed the "most probable" answers for a "typical" case. Every case is different. There can be specifics such as cross-collateralization and such that can complicate matters, and Trustees have good and bad days too. So, worry if you must, but these things are in the pool - except the bank account. Move that now.

[lorelei]

Thanks for your reply!

If the credit union is listed as a creditor (say, for a home or car loan, or a credit card), there is a great chance that they will not only freeze but possibly seize your account. However, if you do not owe them money, your account should be safe. This is Reason #1 to Not Bank Where You Owe Money if you plan to file Ch 7. Whether you reaffirm the loan or not, you will likely have a problem here, if only temporary. I suggest that you do everything possible - NOW - to pull funds and redirect any direct deposits into a new checking account elsewhere.

They do have my car loan, but it is current and I've never missed a payment.

My attorney said that the freeze n seize rarely happens in our area, and is less likely if you indicate you intend to reaffirm, like I did. I suppose I can try to get another checking account. Honestly, I'm scared to because I'm thinking they'll look at my credit report and say no. A part of my filing is a $500 overdraft account from a different bank. Shot myself in the foot, I think, though I was unemployed and honestly couldn't make the payments :-/

As for an objection, that usually happens in two cases. One, if you used that credit line within 90 days before filing on a fairly large purchase. In that case, you might be liable for that portion charged. Second would be a local creditor who would try to take the effort to derail your filing. This rarely happens, and the creditors who might actually show up often know that they have NO CHANCE to get the Trustee to toss the file. Usually it is simply a way to show up and chew you out for defaulting. Like I said, very very rare, and more of an amusement than anything else.

I haven't used my credit cards since early July 2010. The last thing I think I used it for was to pay for a hotel room (not a fancy one) the night I had to take a class out of town for grad school. I don't really think I'll have problems here since it's been so long since I used them. I hope I won't!

As for the Trustee, well, that depends on your file. Lots and lost of posts here on how to make sure that your filing is innocuous and does not warrant special attention. That is the best way to fly a Ch 7, because trying to read a Trustee's mind is frustrating, and you can't do anything more than prep your case and present it as best you can.

I think my case looks pretty straight-forward. I was laid off for six months and then hired at a job where I took a 41 percent pay cut from what I used to make. I have a house I'm surrendering and a Hyundai. No boats or second properties or anything that might raise an eyebrow.

Closing depends on a number of circumstances. It can take some jurisdictions a year or even two to close a case after discharge, and for nothing more than they simply don't get to it. After some time goes by, you might be able to call the court and see if it is closed - that sometimes prompts them to close the file right then and there. But, again, little you can do sometimes but wait.

Does it matter, for all practical purposes? Between the discharge and the closing, are you in some sort of limbo where there are things you can't do?

[btbeme]

Sounds like your attorney has this pretty well dialed in. I can't promise there wouldn't be an issue with your account, but if he says not to worry then don't worry. Local credit unions can be very nice sometimes.

As for closing - the only thing I recommend is to keep your atty informed of any change of address or phone until the case is closed. Otherwise, no real limbo.