Discharged but Trustee left case open

[StEt0417]

We filed Ch. 7 in . 2011, got discharged papers in 2012. We decided to short sale the house, its been a process of 7 months now. Oct. 2012 Come to find out the trustee left the case open. Attorney said she left the case open and forgot to ask for our a copy of our tax return. By law he said they can leave a case open for 2yrs Attorney was able to exempt it. However Trustee has filed an objection and is trying to collect our 2011 tax refund of 4g. We used the money to buy a car and pay for our move. So we dont even have it anymore. They have a hearing to decided of the trustee will win or if the attorney will win. Has anyone had this happen? Our realtor is getting frustrated and the people who want to buy it are ready to back out. Realtor is trying to hold on to them. However my husband wants to cancel the short sale and move back into the house. I however think we already left that place so why go back. We are in a better place fincially now.

Has anyone had this happen with a trustee? I just thought it was crazy since nothing was brought up at 341 meeting, she wasnt even there. Now she wants to collect the tax retun. I thought once it was discharged thats it. I mean its been over a year now since we got discharged

[AngelinaCat]

We were about 15 months before our Ch7 closed, but we were an Asset case. Was your case declared an Asset Case, and you didn't realize it?

[despritfreya]

You cannot sell the home (without a court order) because the property is still property of the estate. You will either need to obtain a court order authorizing the sale or get the Trustee to abandon the property. The abandonment route, if done by the Trustee before the case is closed, is quicker and cheaper but, since you are arguing over whether or not the tax refund is exempt, the Trustee is unlikely to help you out. Never hurts to ask. These issues should have been discussed with your attny before you ventured down the short sale path as, many times, such endeavors are not in a debtor’s best interest.

Your discharge has nothing to do with the Trustee’s administration of your case. The Trustee has the right to collect assets. You have the right to dispute the Trustee’s entitlement to those assets. If you cannot settle with the Trustee, the judge will decide. That is just the way it is.

Des.

[LadyInTheRed]

Did you reafirm your mortgage? If not, why bother with a short sale? I'm with your husband. Move back into the house and live for free until the bank forecloses.

[StEt0417]

The trusteee did abandon the property. The attorney said we could rent it, live in it or short sale it if we wanted.

[StEt0417]

Did you reafirm your mortgage? If not, why bother with a short sale? I'm with your husband. Move back into the house and live for free until the bank forecloses.

No we did not reaffirm the house. Are you saying a short sale really has no benefit then? I wonder if we can back out of it. We've had a buyer back out.

[StEt0417]

Our attorney said they abandoned the property. We even heard them say it at the 341 meeting.

[LadyInTheRed]

No we did not reaffirm the house. Are you saying a short sale really has no benefit then? I wonder if we can back out of it. We've had a buyer back out.

Assuming you are not paying HOA fees, the only benefit I can think of is to get title out of your name more quickly. But, that hardly seems worth the hassel of the short sale. The bank will foreclose eventually and your name will no longer be on title. In the meantime, you could live there for free.

[despritfreya]

If the property has been abandoned there is nothing stopping you from doing the short sale. You need to obtain a copy of the Notice (or Order) abandoning the property. That is all a title company needs to complete the sale. Of course, if you do not have consent of the lender(s) then there will be no short sale anyway.

Des.