341 Notice

[May2014]

We got our letter for the 341 meeting (June 30) and it states that the presumption of abuse does not arise. Is it possible that down the road the trustee can change that status? Does everyone start out with the "no presumption" declaration, even those who are eventually told to convert or dismiss? I'm trying to figure out if we're in the clear or if there is still a chance we're going to end up in a 13. I am making myself so absolutely crazy over all this, and my Xanax is barely taking off the edge...

Thanks for understanding...

[keepsmiling]

Are you over the median?
Assuming things are as you stated in your petition, you have NO reason to worry. Most 341's are over and done with in five minutes with the tt's blessings.
Relax, have a drink, take a walk or a nice bath. The hard part is over
We'll hold your hand on the 29th and on the 30th you will report back with good news that you have joined the 60 day club.

[May2014]

We are over the median by about $22k and we have a rental property headed towards foreclosure. The trustee raised eyebrows over that rental. Apparently, the law is kind of murky when it comes to properties being surrendered. A Chapter 7 typically looks backwards but since we haven't made any payments since December (or any income for that matter), it calls into question on whether or not we can deduct it. However, our last two years of tax returns show a loss, so really, looking at the last few months doesn't seem all that fair.

Trustee was supposed to get back to lawyer about that, but lawyer has been out of town and this notice shows up. Not sure what it means in the great scheme of things. I've tried to figure out our DMI if we didn't count the house and ended up in a 13, but I've gotten numbers between $382 and $1113, so that's not helping my sanity? The not knowing the ultimate outcome is going to kill me!

[May2014]

Convert to 13 before 341?

We filed Chap 7 last week, but there's a question about the ability to deduct a rental property that we haven't paid on since December. Our attorney is going to crunch the Chap 13 numbers for us to see what payments would look like. Is it possible to convert fro a 7 to a 13 before the 341 meeting instead of waiting around for what's most likely the inevitable? Or are we stuck for the next several months waiting for the trustee to make his objection and then converting?

[LadyInTheRed]

May2014, I combined your two threads because there is a potential for the same topic to get discussed in both places which can get confusing.

Why be in such a hurry to give up and convert? I understand the desire to not draw things out. But, the trustee raising an eyebrow does not mean you won't get a Chapter 7 discharge. You should at the very least wait until the trustee files an objection to Chapter 7 discharge before you do anything. Wait until your attorney returns and discuss the situation.

Are you sure the issue is the means test and not what you put on your Schedule of Intentions? [ETA: the distinction might not really make a difference and either is possible, but it is good to understand the issues]. If you said that you will surrender the property, then the U.S. Trustee might object based on a totality of circumstance saying that the deduction is not allowed on Schedule J. I don't believe the law is settled on the issue in a Chap 7 context, but a Supreme Court ruling in a Chap 13 case could be applied to a Chap 7. In fact, the U.S. Trustee has taken the position that it should apply to Chap 7 in the following brief of the issue: http://www.justice.gov/ust/eo/public...abi_201104.pdf

What box was checked on your Schedule of Intention with regard to the rental property?

Try not to panic. You hired an attorney to help you get a Chap 7 discharge. Give him a chance to do that. There is no reason to convert before the 341 and before the trustee files an objection to a Chap 7 discharge.

[LadyInTheRed]

Oh yeah, to answer your initial question, the statement that the presumption of abuse does not arise is based on how the means test was completed. The U.S. Trustee can argue that the presumption does arise.

[May2014]

We chose to surrender the property in our SOI., just to clarify.

Lady, you are absolutely right. I don't need to be in a hurry and I paid good money to have someone do the thinking for me. The lawyer's got this. All I really need to know is that I am going to be debt free in roughly 5 years (at the very latest!). I can live with that....