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Filed Chapter 7-Help

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    Filed Chapter 7-Help

    I have a weird situation.
    Some backstory: I filed for divorce in November 2019. I filed for bankruptcy in January. Luckily, we kept things separate debt wise, and I can claim my residence under the exemption.
    I make greater than the median.
    had my 341, no issues. Trustee was great. Filed a report of no distribution (today) and no assets available. Due for discharge in May.
    However, the UST got involved two weeks ago. Questioning everything and wants all of this documentation.
    The UST is questioning my ex’s income (wants hers included (attorney is fighting back), and every deduction under the sun. Does anyone have any advice?

    #2
    First, welcome to BKForum.

    Since you are still married, and you are over-the-median-income, the United States Trustee (UST) is interested in your case because you are filing alone.

    Generally, all of your spouse's (not "ex-spouse" since you didn't list any final divorce decree) are still in play and must be included in the bankruptcy schedules. Your attorney then uses the marital adjustment to take away some or all of that income from your Means Test. But that doesn't mean that the UST will say it's all okay. The UST will certainly demand very detailed documentation on this.

    Unfortunately, this is an area where the UST will almost always poke and prod and look at every single line item on your Means Test and Schedule I/J. Their job is to scrutinize certain cases and especially where only one spouse is filing and both have income.

    My suggestion is that you have to actually comply. You will have to defend every single number.

    May I ask why you didn't wait until your divorce was final?

    Chapter 7 (No Asset/Non-Consumer) Filed (Pro Se) 7/08 (converted from Chapter 13 - 2/10)
    Status: (Auto) Discharged and Closed! 5/10
    Visit My BKForum Blog: justbroke's Blog

    I am not an attorney. Any advice provided is not legal advice.

    Comment


      #3
      I moved out and couldn’t afford the bills on my own.

      Comment


        #4
        It just makes things more complex that you are still legally married and both of you have income. It makes it more complex that you are over-the-median income with your combined income. The UST, while they are asking many questions, are trying to make sure that you qualify for a Chapter 7 discharge.
        Chapter 7 (No Asset/Non-Consumer) Filed (Pro Se) 7/08 (converted from Chapter 13 - 2/10)
        Status: (Auto) Discharged and Closed! 5/10
        Visit My BKForum Blog: justbroke's Blog

        I am not an attorney. Any advice provided is not legal advice.

        Comment


          #5
          If you were filing in my district as above median in either chapter, anything above a minimalistic nominal amount will require receipts. A good lawyer would have asked you for receipts on every controversial expense amount before filing since the trustee will eventually ask for them anyway. Even then, the trustee may challenge you on some of the receipts because they're one-time expenses or extravagant. This type of scrutiny for above median is not limited to married filing alone, but married filing alone makes it even worse due to the double counting issue in the marital adjustment.

          Comment


            #6
            Dumb question. The UST waited until after ten days from my (341) meeting to start asking questions.
            341 was on 3/6, the UST didn’t reach out until 3/17.
            I thought they only had ten days? Or is that only a suggestion?

            Comment


              #7
              Originally posted by RU5781 View Post
              Dumb question. The UST waited until after ten days from my (341) meeting to start asking questions.
              341 was on 3/6, the UST didn’t reach out until 3/17. I thought they only had ten days? Or is that only a suggestion?
              There are actually two dates for the UST. The first is 10 days from the "first" actual 341 meeting for creditors. That's for a complaint related to an abuse. An abuse would be that the debtor has the means to pay creditors in a Chapter 13 ("fails" the means test), or some other reason related to what is called abuse under 707(b).

              But, the UST also has a trump card. This two-part trump card is good until the "last day to file a complaint" which is 60 days from the first scheduled 341 meeting of creditors. They always have this trump card, which is for "bad faith" or a "totality of circumstances" exception to the discharge. The UST can also extend this time by motion and they are almost always rubber-stamped (granted automatically).

              Chapter 7 (No Asset/Non-Consumer) Filed (Pro Se) 7/08 (converted from Chapter 13 - 2/10)
              Status: (Auto) Discharged and Closed! 5/10
              Visit My BKForum Blog: justbroke's Blog

              I am not an attorney. Any advice provided is not legal advice.

              Comment

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