US Trustee Objected to my discharge

[Stressedout]

Ok...what type of business are we talking about here?

If you can document where all the money went, then you should have no problem with the objection. But, I would be concerned that the trustee simply went ahead and filed the motion to dismiss instead of simply asking for documents...something is not adding-up.

Hello. The US trustee did request additional documents during the additional 60 day extension granted by the court. She requested 2 years worth of credit and bank statements which she got.

The 60 day extension ended on march 3rd but on on feb 29th she filed that complaint against me.

[DivorceRuinedMe]

I really hope this works out for you. I came really close to a 727 myself. I *think* I dodged it. My case was extended b/c I was audited and my income was wrong on the petition originally and the audit caught it. Didn't matter that my atty filed an amendment shortly after the petition was filed (it was a clerical error made by the paralegal and both me AND the atty missed it). It caused a boatload of trouble though and the US trustee said she had to justify why she WASN"T going to file a 727 (hence our meeting). I think I satisfied her curiosity. Haven't found out yet for sure though - still waiting for my atty to call me to tell me what she thinks of how the meeting went.

I'll keep ya posted. Definitely keep us posted on your situation. Sounds positively nightmarish!

[PaKettle]

I agree with rfassett above. If you are quite sure there is nothing wrong with anything you've done then you have to make sure you can prove it. Think about it, go through your receipts and books, and be able to present a case that justifes what you did.

Call your attorney and tell him you NEED to speak with SOMEONE who can help you prepare for this - him/her or a substitute who is handling things for him while he's out of town.

Get aggressive because if you don't defend yourself, you are liable to have your Ch. 7 dismissed, then they could come after your salary with garnishments, etc.. So you do NOT want to have your Ch. 7 dismissed!

Even if you are 100% innocent of any wrong doing, you could lose the case simply by not being able to prove yourself innocent. It's kind of like "Guilty until proven innocent" instead of the usual "innocent until proven guilty" as I see it.

So get busy looking at all your expenditures and be able to show "Where all the money or assets went" and have answers to everything the Trustee will be asking. MAKE your attorney help you as much as possible, that's what you're paying him for. He should know what the Trustee is objecting to and why and be able to direct you as to how to defend yourself. It may cost you extra but if you lose this case it will cost you a lot more.

I hope you can prove your side and this all works out in your favor! Good luck!

[Stressedout]

Section 727(a)(2) has to do with intent of the debtor to hinder, delay, or defraud a creditor or an officer of the (bk) estate by transferring, removing, destroying, multilating or conceiling assets. (3) has to do with the same activity with debtor's records. (4) has to do with knowingly and fraudulently lying under oathe or making false claims. And (5) has to do with the debtor failing to explain satisfactorily, before determination of denial of discharge, any loss of assets or deficiency of assets to meet the debtor's liabilities.

Where do you fit in there? If I were you, I would be having a heart to heart with your attorney, but not before I boned up on what the issues might be and how I would propose to answer those issues.

This scenario is akin to what I tell folks that complain about their health insurance not allowing this that or the other thing. Ultimately, your health is your responsibilty - not the insurance company's and not your doctor's. And so it is in the present case, the outcome of your bankruptcy is ultimately your responsibility, not your attorney's. Get aggressive and get your attorney to file a motion objecting to the dismissal. You mentioned your attorney is on a mini vacation. If you can not talk to your attorney, ask the paralegal who is taking care of the attorney's emergency cases. And last time I was aware, Utah had telephone service. And I will bet your attorney has a cell phone to which the paralegal has the number. Call the paralegal and tell her that you want to hear back from the attorney by (set a realistic time). Get busy - and don't take "no" for answer.

The above is all predicated on your frim belief that you can beat the 727 charge. I went to my Rule 2004 with complete confidence that there was not any intentional malfeasance, and there certainly was not any fraud. The attorney doing the inquisition pointed out a question that I had answered incorrectly on the petition and that I had swore under oathe at the 341 meeting that the petition was correct. I explained to the attorney (convincingly I think) that first of all, I did not know that I had answered the question incorrectly. And swearing under oathe that the petition is correct only matters to the extent that I knew the answer was wrong - which I did not.

HHM mentioned that the personal vs business is a non-issue. In most cases that is correct. It is an issue for the U S Trustee. The Trustee will look for presumption of abuse under Section 702. But since 702 deals with consumer debt, if your preponderance of debt is not consumer debt, then according to the attorney at the 2004 meeting, the U S Trustee will give away 702 and look for dismissal under 727. As to your case with the Corporation, as HHM points out, Corporate chapter 7's do not qualify for discharge. A Chapter 7 bankruptcy of a corporation is a strict liquidation of all assets to pay the creditors.

Hello. It still makes me wonder if the lawyer should of checked off the box that states most of the debt was related to business debt.

[rfassett]

And I would suggest that it doesn't matter at this point. The consumer / business debt issue, as I understand it, centers around the application of Section 702. It sounds like the U S Trustee in your case (like in mine) has already conceded Section 702. Thus they are seeking dismissal under 727. If it had been "checked off" as business debt from the get-go, you would still be dealing with the U S Trustee and Section 727, IMHO.

[leftyf]

$100K could be two employees payroll for the year without enough revenue to cover it. Seems pretty easy to get into this kind of debt to me if you're not keeping a close eye on the profits or if you've deluded yourself into thinking you are investing for future growth...then wake up one day and realize your business idea was never viable to begin with. It does seem that this would be pretty obvious to the trustee...unless the trustee knows something that we don't? Those trustees seem to know what is going on and it sure seems that it would be futile to hide anything from them. Good luck and I hope you're really not hiding anything.
Lefty