Case being re-opened?

[DanaS]

My mother died in July of 2005 which left me and my business in financial ruin after a 3 year run with here condition which finally ended up with having to put her in a Nursing Home 6 weeks before she died.

Therefore, in August of 2005, a few weeks after her death, I realized that I was going to have to take some action due my personal financial situation as a result. So, in September of 2005 I filed Chapter 7. My case was discharged in December 2005 - all of my debt was unsecured credit card debt and not one of the creditors stepped forward.

However, since I was self-employed as a Sub-S corp., the Trustee alleged that the "tools of my trade" (which my attorney assured me could not be siezed) were property of the Sub-S corp and filed for seizure of my business equipment. A hearing was set for January of 2006 and my Attorney once again assured me that there was no case. Then 30-minutes before the hearing my attorney called me and said that the Trustee had offered me a deal to buy back my assets at half value and I was advised to take the deal. I was too beat down to fight anymore and worn out with all the things my attorney had told me that never came to pass - so I agreed to come up with the money the Trustee wanted and just starved for the next several weeks.

In March of 2006, my Brother called me (only other surviving relative) and said he hadfound evidence that my Mother had not died a natural death, but in essence had been murdered in the nusing home and he wanted to pursue a lawsuit against the nursing home in question. I was too exhausted after the previous 3-1/2 years of Hell to even pursue anything else, plus I did not have a dollar left to my name. He said his lawyer would take the case for no money up front. I still fought him on this for several weeks telling him that there is no way to sue a nursing home and get anything, but he kept pushing until I agreed to at least sign the lawsuit as a co-plaintiff (since he said it would look bad if just one son of the deceased was filing). So the lawsuit was filed against the nursing home in May of 2006 - 5 months after my Chapter 7 discharge and 4 months after I wrote the check to the Trustee to get my old used equipment back.

In October of 2006 my Chapter 7 case was finally listed as "Closed".

I did not hear another word on lawsuit surrounding my Mother until around January 2007 and my brother recieved word from his Attorney that the nursing home had filed bankruptcy and that the case had been "stayed" whatever that means. I just assumed it was dead - never expecetd to get anything anyway.

Anyway, last week I get a letter from the Trustee that says they discovered about this lawsuit (my guess is because the nusring home filed bankruptcy and it showed up somewhere as a result) and were going to re-open my case and file a lawsuit against me to get any assets coming to me from this lawsuit that me and my brother filed.

So my questions are:

(1) Can you not file a lawsuit after a Chapter 7 discharge and receive any compensation? Is it because my case had not officially been "closed" yet? (Of course my Attorney said it was closed after January 2006, but it was'nt)
(2) How long do you have to wait after filing Chapter 7 before you can be damaged by a 3rd party and file a lawsuit and receive anything (although I don't anticipate ever wasting time with a lawsuit again)?
(3) Since the nursing home filed bankruptcy - I assume our lawsuit is dead and no money coming - so what is the Trustee looking for?

I have never filed a lawsuit in my life until this one after I filed Chapter 7. I was well aware that I had to claim any assets PRIOR to filing, but I did not know that I could not be part of a damages lawsuit after I filed and was discharged. The way I read this is that someone could do me damage that I was totally unaware of prior to filing Chapter 7 and even for several months following, but if I did discover those damages later, there would be nothing I could do to that party - is that right?

[JRScott]

I'd call up your lawyer and talk to them. If the case is reopened then your lawyer should represent you.

I know you have to list any potential inheritance you might inherit. However I'm not sure about listing lawsuits, especially since you'd have no idea you'd even get anything.

I also suspect since they filed bankruptcy and a stay was issued it is clear they listed your brothers and your case against them in the bankruptcy papers. It is also unlikely you'll get any money. Which to me seems like the Trustee is wasting his time.

Anyway call your lawyer up and tell him about the letter, perhaps make an appointment to see him since they are reopening your case. He might be able to help you.

[keepmine]

[emoney]

The issue here is timing. It is really that simple. When you filed BK you did not know that you may have a claim against the nursing home.
If you did you should have listed it. That claim is the property of your BK estate.
As it turns out you did not know of the claim at the time of filing. That does not change the fact that any recovery you may get from the LS is the property of the BK estate.

I hope this help, and sorry for your loss. I lost a business and my father at almost the same time and I understand your situation.
regards,
emoney

[DanaS]

What a mess.

I guess what I am hearing is that I was unable to file the lawsuit as a co-plaintiff even though it was 8 months after I filed Ch7 (and I never even considered doing so until at least 6 months after the filing). I find it hard to imagine that anyone would file Chapter 7 and destroy their reputation in the wild hope that they "might" get some kind of settlement from a nursing home - even if they had that intention prior to filing - talk about a long shot!

And the real question is why would a Trustee reopen my case until a settlement was awarded - all that would do cause me to do is drop the lawsuit as there would be no incentive to put more time, effort or money (if I had it) into winning the case. If they somehow had a legal right to such a settlement (which is still hard for me to imagine, but shouldn't be at this point), why would they not wait until there was something tangible to get (that is what I would do if I were them and I had a "legal" right to the award). I would be waiting for the gavel to drop and say "Thank you, we'll take that settlement now" on the way out of the courtroom.

Of course, all this is a moot point since the lawsuit is dead - if not through the defendant filing bankruptcy, through my unwillingness to pursue it any further. I never expected to see any settlement anyway - it was never my idea - I just agreed to it - I was not the sole plaintiff on the lawsuit.

I guess what I need to know now is - what does it really mean that my case is not "closed" anymore? Beyond the lawsuit in question, what else should I expect and how does this damage me further? What if they choose to keep my case open for the rest of my life? Can I not just sign something that tells them that can have whatever they want from the lawsuit if it ever comes to pass and have this go away? Can I officially drop the lawsuit and get rid of this to where they will close the case again? I tried to speak to my lawyer, but he will not comment since he apparently represented the nursing home in another case and it is a conflict of interest - talk about a never ending web of crap! And once again why did nobody ever tell me I was doing anything wrong - I had no idea.

[DanaS]

If you could have sued somebody within 10 days of your filing, you are supposed to notify the trustee and the lawsuit may well be the property of the bk estate.

If this one sentence is true, I guess what this means is that if you "COULD HAVE" sued anyone for maybe years prior to filing BR up until 10 days after filing - even though you had no idea of the wrong that had been done or intention of filing a lawsuit, then any settlement years ito the future would go to the Trustee - is that right?

If that were true why would any idiot (like me) pursue a lawsuit for no reward? And why did the lawyer not tell me I was wasting my time. All I can figure is the lawyer knew he would get his 50% of the settlement even if I got nothing as a result.

[lrprn]

Sorry to hear you have having old ghosts resurrect themselves, dana . Since you filed in Sept 2005, that means your Ch 7 case is under the old bankruptcy law. Trustees can take the proceeds of any windfall or lawsuit if the proceeds come before your case is closed or within six months of your Ch 7 case closing. Your trustee is stating that you were in an active bk case and didn't notify the trustee or court about the lawsuit, so that's why he reopened your case. Unfortunately the law doesn't accept "I didn't know I was doing anything wrong" as a legal defense .

If this lawsuit ever does produce any winnings (sounds like it won't though if the nursing home filed bankruptcy), then the trustee will be entitled to your half of the award up to the amount owed to your creditors on the day you filed.

You need legal representation again to ensure you get your fair shake in this deal. You don't have to use the same lawyer again if you weren't happy with him/her. Make 3-4 free consultation appointments with other bk lawyers in your area, concentrating on those who take complex cases involving personal businesses and trustee objections.

Good luck and please keep us oosted on what you find out. We're here to help you any way we can.

[JRScott]

I'd do like lrpn suggests.

Since the lawyer that handled your bankruptcy initially said he has a conflict of interest you could ask if he can recommend someone to assist you. If he can't then just go to see a few consultations with lawyers in the area and pick one that you feel good about.

I hope you can get it all cleared up .

[DanaS]

Thanks for all the feedback! Here we go again - trying to prove I have nothing for them to get.

I hate to admit it, but I don't have the money to even hire a lawyer (I pretty much gave up trying to get ahead after the Ch7) - especially since there is nothing to fight for in this matter except returning my case to a closed status, there is no "money" to be had by anyone (except the attorneys again).

[HenriettaHen]

I don't think you have anything to really worry about here. All these computers talk to each other and the humans lag behind.

Even if you don't have a lawyer, try not to get too freaked out by these letters from the UST or whomever.

I have found that the court clerk ladies in these offices are very helpful and understanding of pro se filers. This may not be true in your locale, so proceed with caution - but DO call the clerks of the Court which sent you the notice, and ask them some procedural questions, like;

To whom should I reply, and in what form?

Is there a deadline?

What forms will I need to file?

They can't give you advice on what to write on your forms, but they will give you advice on what forms to file with the Court - and I have found nothing but help in being a good pro se filer, and filing complete sets of forms on my own.

If there is a phone number for the Trustee, then call him/her on a nice morning when you are feeling fresh. Ask them what they want from you, and then go about getting it. Chances are, they would appreciate documentation. Prepare a short, fact-filled nutshell version of this situation, and just ask them what documentation they require to support your story.

The great cogs relentlessly turn, don't they?

I would tell the Trustee the whole truth and nothing but the truth, because although you have made a mistake from the Bakruptcy Court's perspective, you can probably lay down a good paper trail / timeline to prove that it was unintentional.

And more importantly, that you had no actual intent or expectation of gain from what you did.

These family problems are the WORST!

How would you feel about simply signing over any proceeds to the Trustee?