Judge vs. Trustee in Chapter 7

[justbroke]

I don't know how it is similar where you won on a 12(b)(6) motion. This is an exemption question and is done by objection not by complaint; procedural posture matters. This is a panel trustee and is not the US Trustee. Not everyone has the resources to "fight" all the time even if Pro Se. At best, on an Objection to Claim of Exemption, you get the judge to overrule the objection.

Otherwise, a blanket statement to always fight mean nothing as the contours of each case are different. To be more helpful, list the actual complaint, representation status, procedural posture, facts, the arguments from both sides, and then the conclusion. Otherwise it isn't too helpful to anyone (here) to say "I fought the law about something similar... and I won."

[APwinner]

Fight them.. The trustee program is full of hack attorneys, people with personal grievences about their legal careers and people who suck at litgation. They use fear and itimidation as a tool of the trade. I had a simmular situation with the UST and won a 12B (6) motion. The Trustee was fired by his boss after.

DONT BACK DOWN.

[vhs]

Thanks again. Well, it will be 5K to gain "40K", after taxes. So, it is worth it.

[justbroke]

And I guess my question remains, why would a trustee object to an exemption that is clearly in my favor?

But it's not "clearly" in your favor. You have to demonstrate that the exemption applies.

For example, Trustee objects to claim of exemption. You then "conference" with the Trustee. The Trustee wants to see the settlement agreement. The Trustee reviews the agreement and makes a determination as to wjether, under bankruptcy law (not common law) that exemption should apply to the settlement in that particular settlement. If the Trustee believes the documentation supports the claim of exemption then they will likely immediately withdraw their objection.

This is the process. No one "knows" -- under bankruptcy law -- if your claim of exemption applies until it is reviewed either by the Chapter 7 Trustee or the bankruptcy court in an evidentiary hearing. The key would be presenting your evidence to the Trustee so that they can make a determination as to whether the settlement is what your purport it to be. The Trustee may think it's a waste of their time to pursue (remember they only make about $65 a case and are not federal employees). Or the Trustee may think that the law is incorrectly applied and objects so that the court may review the settlement agreement.

There is no way to tell the temperament of the Trustee in advance.

I will pay the retainer for this because I will win.

I don't know that. No one knows that at this point in time. Because it's the American system, you will lose the money you pay to the attorney to fight this. I don't know where the break-even point would be, but I wouldn't pay $5,000 to chase $4,000 because that's $1,000 loss to prove your point.

[vhs]

Yes, I am just going to claim the exemption and go from there.

I will pay the retainer for this because I will win.

I guess I need to shop for an attorney that will take the case for a low retainer and go from there. I don't think this possible situation will need many hearings, because I have a clear exemption.

And I guess my question remains, why would a trustee object to an exemption that is clearly in my favor?

[justbroke]

... because my BK attorney has not read the settlement correctly

And there's the rub. Perhaps the attorney did read it correctly and the settlement is written incorrectly (wrong language to distinguish). Besides, you would need to pay your attorney to fight for your position. It doesn't read like you would be willing to pay $300-500/hour to fight the trustee over a potential objection to claim of exemption.

I'm sensing there is something else going on here. There is something in the settlement -- and I don't want to see it -- that appears to your attorney that the settlement proceeds are not subject to payroll taxes (e.g., reported on 1099-MISC and not W2). If you should fire your attorney you'll have to find a new one and that attorney has to be willing to read the settlement agreement the same way that you are reading it.

I say this because we are going round-and-round because you still have doubt in this claim of exemption being valid. It either is or is not. You can't test it unless you claim it. You must be willing and able (financially) to defend your position if there is an objection by the Trustee or creditors.

Your decision here is whether or not you should fire your attorney, cause them to withdraw (because you filed papers behind their back), or accept their reading of the settlement.

I don't know how we can help you, other than to say that you need to sit down and have a conversation with your BK attorney and not argue with them over the reading of the law. Either ask them to explain why it doesn't apply or tell them that you don't agree and that you should part ways. Then go hire another attorney ($$$) and hope that they agree with your position on the settlement.

[vhs]

What confuses me in this is that my attorney has indicated that the exemption is not guaranteed for me (because my BK attorney has not read the settlement correctly), but it is not guaranteed that the trustee will win, if they object, either.

Why would a trustee object when he isn't sure?

My attorney also said it would be costly to fight this, and to negotiate with the trustee, instead. However, I am right in this situation, so I don't see how the trustee objection will hold up. Of course, it would be in the best interest of the trustee for me to negotiate when the trustee should know they will lose in court because the settlement shows a wage exemption. Again, I think the trustee and my attorney are not reading the settlement correctly because of they limited knowledge outside of bankruptcy laws.

I am not trying to knock BK attorneys, but it seems like they don't understand most laws outside of bankruptcy. A retaliation settlement is considered wages in my case because this was from my previous employer and it cost me my job and back wages. That is not my opinion. It is what the law indicates. So, I have no idea why the trustee is going to object when they are on the losing side of things.

[vhs]

Thanks for the feedback.

I think my attorney just isn't reading the settlement correctly.

[justbroke]

Posted at same time as Des... and yes, no conspiracy.

Edit to add: In cases where my client insists that I argue a position that I disagree with and/or has no basis in law or we no longer see "eye-to-eye", I must withdraw from the representation.

This. (Emphasis added is mine.)

[justbroke]

You keep asking the same question different ways. Please read my post at https://www.bkforum.com/forum/before...se#post1035900

Where would the opinion of the judge come into play?

If there's an objection to claim of exemption, a hearing must be scheduled for the court to take evidence to prove either the exemption applies or it does not apply. See my other post.

Clearly, the law takes priority over all things, correct?

Applying the law is the key. The objection is technically whether the exemption is being correctly applied.

Do the judge and trustee have a close relationship in these exemptions objections?

I don't know what this means. They argue the law. The trustee, if they objected to a claim of exemption, would be trying to show that the exemption doesn't apply because (a) the statute is being misapplied or (b) a necessary element to claim the exemption is missing.

I am curious because I have a clear exemption.

You believe that you do but you may not. That's the question. Maybe you're missing an element or the statute simply doesn't apply.

think my attorney and trustee are in collusion, quite honestly in my situation (has anyone heard of a situation like this?

There is no one in the bankruptcy court in collusion. Why would a bankruptcy attorney want to be known as anti-client? In fact, the rules of professionalism requires the attorney to represent the interests of the client. A bankruptcy attorney is not beholden to the bankruptcy court or the trustee; they are beholden to their client. (What attorney wants to throw away a $150-$250K education, face sanctions, and a thriving practice?)

The attorney and trustee negotiate all the time but when it comes to the application of the law, an attorney must not file anything that they don't believe to be accurate (FRBP 9011, and FRCP 11).

I am sure it has happened in the past.

I'm unsure this has happened.

I just don't want to have to get another attorney, if mine doesn't comply with my request to list the objection.

For the reasons I stated above. They may have a Rule 11 issue (FRBP 9011/FRCP 11) with that "claim" of exemption. An attorney sets the strategy and applies the law. The client says whether they want to follow a particular strategy. The attorney doesn't try to apply law based on what the client believes should be used; it must be based in fact (Rule 11).

I can't inform you what to do from here. If you have already sat down and had the attorney explain why the exemption doesn't apply, then that should be a good clue as potential trustee objections if you tried to do this.

[despritfreya]

Sorry, but here we go again. There is no grand conspiracy. NO ONE is conspiring against you. I don't know any attorney who would risk a career over a client (other than Trump's attorneys - sorry had to say that). Same for any judge or bankruptcy trustee.

Edit to add: In cases where my client insists that I argue a position that I disagree with and/or has no basis in law or we no longer see "eye-to-eye", I must withdraw from the representation. My guess is at some point, your attorney will withdraw.

At trial, both sides put on their case. The judge then evaluates the positions of each party, compares those positions to the law (both statutory and case ) and decides. If the losing party does not like the decision an appeal is filed. In bk court, the appellant can elect to go to the BAP, if there is one in the District. If such an election is not made or there is no BAP, the appeal goes to District Court. If the ruling at the first appellate level is not liked, it can be appealed to the Circuit Court of Appeals. After that, only the granting of a Writ of Certiorari gets the matter to SCOTUS.

And here is the other problem: What you think ("I have a clear exemption") does not matter. What matters is proving your case to a judge and, if the judge rules against you, winning the appeal.

Des.

[vhs]

Hi all...really appreciate all your help the last several weeks. I have another question here.

I was wondering what leverage a chapter 7 trustee would have if they object to an exemption in a Chapter 7 versus the law, which may clearly state an exemption does exist.

Where would the opinion of the judge come into play?

Clearly, the law takes priority over all things, correct?

Do the judge and trustee have a close relationship in these exemptions objections?

I am curious because I have a clear exemption, but my attorney is giving me some push back. I think my attorney and trustee are in collusion, quite honestly in my situation (has anyone heard of a situation like this? I am sure it has happened in the past). Very strange situation. But, I am not going to back down because I am very confident I am correct and the law supports me. I just don't want to have to get another attorney, if mine doesn't comply with my request to list the objection. I guess that what I will have to do, if worse comes to worse. Either get another attorney to list the exemption I want, or do the amendments pro se?