100K limit? myth or real

[slam22]

My attorney told me that the UST would look at my case closer because of the high debt(162k)and being 23k over median.

Cali our attorney told us the same thing bascially. We have 200k unsecured, not counting our 200k (now unsecured HELOC due to upside down). We are about 30k over the median.

[Help!]

My attorney told me that the UST would look at my case closer because of the high debt(162k)and being 23k over median.

It seems awfully late in your case for the UST to appear. I'll bet they don't get involved in your case because of your husband's deployment. Congress did a lousy job of defining "special circumstances" rebutting abuse but military deployment was one specifically mentioned in 11 USC so I'd be surprised if the UST would file a presumed abuse statement. Their time is almost up anyway (10 day rule).

[Cali]

My attorney told me that the UST would look at my case closer because of the high debt(162k)and being 23k over median.

[Lajazz947]

Thanks. That's a better answer.

[Help!]

A declination is the best possible outcome after a statement of presumed abuse has been filed. The UST allows the Ch. 7 to proceed unopposed, without any further effort to convert to Ch. 13 or dismiss.

[Lajazz947]

Thanks, what exactly is a declination.

I read about it and it seems that in a declination the UST tries to throw it out entirely or does this mean they try to throw it into a 13?

[Help!]

YES - the good news is that the UST has only 10 days from the conclusion of the 341 hearing to file a statement of presumed abuse. After that, they have only 30 days to file a motion to dismiss/convert or a statement as to why dismissal/conversion is not appropriate (a declination... what happened in our case). Occasionally they are granted an extension, but they must have compelling reasons (these are not routinely granted in our district and I've even seen denials of the UST's motion to extend).

[Lajazz947]

Thank you very much. It was good working with you. Even though I have it very organized you posed some very good questions that will help me quite a bit.

I know that it will not be as easy as it appears, or maybe it will be easier. I just hate surprises so I am trying to be as proactive as possible.

One last question:

Is there a statutory time-line for the UST to challenge your petition before he/she HAS to give up?

Thanks

[Priceless ProSe]

Sounds like all your ducks are in a row, make sure to clarify with the attorney about the car. Sorry for all the questions, hopefully if I ever have to file BK again (no way in heck) I have those kind of problems (having to explain why i have oodles of cash! just kidding)

Hopefully someone with real knowledge will come along now that youve really got it spread out like this. Best wishes to ya

[Lajazz947]

Here's how it worked:

The IRA was a private placement that stayed inside a self directed IRA so the money was never removed from the IRA account itself.

The promised return was $500,000 from the development of the property and subsequent refi to take the cash out to pay off investors.

$300K back into the IRA and $200K outside the IRA that I would pay regular tax on.

I was counting on the $200K to use towards the remodel and took out another $200K from a home refi.

The $200K never came back for me to pay the money that I used on unsecured CC's and lines of credit so I got stuck with $200K in debt that I cannot pay now.

I would never get the full $500K back from him since he did not use my money to purchase the property that he said he was going to and the property has not been developed.

I hope it's making a little more sense now.

The car situation is indeed the same associate ( I only have one) but all the dealing are on the up and up so I can't see that as creating any type of fraudulent transfer other than the UST making him give back the $40K that I will repay him somehow.

[Priceless ProSe]

I really dont know much about IRA but wouldnt you have to take it out (no longer protected) to reinvest? It seems you took the funds out of the IRA and borrowed against the speculated success of said project, and that if the project would have worked out you were planning to use these funds to pay back the creditors. I dont understand how this makes the funds protected from the creditors.

Its funny when I really think about my questions towards you, the money we borrowed from CC went primarily towards depreciating consumer goods ! Admittedly I dont even have any retirement funds as of yet.

Regarding the car again, i understand there is a paper trail to your associate paying for it,which is good, but is it a secured debt? If there is no contract between your associate and you (one stating that the car is collateral for the loan) what would keep them from taking the car and declaring (well they wouldnt actually have to declare it obviously) him an unsecured creditor (oh and please say its not the same guy you gave the 40k to..hehe)

[Lajazz947]

No, it is actually helping. Allot!!!!!

All the posts are.

Let me clear a few things so that there is a clear understanding........

The $300,000 that I am in court for was IRA money that was protected anyway. The difference that I expected and the debt I incurred was for money that was to be paid to me upon the development of the property that my investment was SUPPOSED to go to and wasn't.

My mistake was relying on a promise of money to be received and using lines of credit, both secured and unsecured when all I got was excuse upon excuse until I found out the truth.

So...the trustee would and creditors would not be able to get their hands on the $300,00 anyway. I can explain it very specifically.

The money that was used to remodel the house also came from a combination of a second, a refi as well as some unsecured relying on the land deal as promised.

I have absolutely NO expectations that I will get anything more than my $300,000 if anything at all since he may file BK and lose all the money in the LLC that he used.

I understand the TT's concern though and I sure see what you all see but I assure you that I can explain it away.

I have SO much documentation that it will make anybody's head spin.

as far as the car goes the money was lent to me from a line of credit on my associates home so it is fully verifiable.

As always, please bring these issues up, they help allot and I never take it personally.

[Priceless ProSe]

Would this then become a secured debt which you could reaffirm to keep the car? If so that would seem to be a huge loophole (im not talking about you, just in general). All anyone would need to do for any high price property would be to say a freind gave them the money for it, and produce an agreement between the two parties, allowing the debtor to keep said property without using any exemption. Maybe the UST would want to see proof from the creditor (friend, etc.) that the money came from them to make the purchase. I guess this post isnt really helping, just some more questions that popped up in my mind.

Whatever happens let everyone know because its very interesting and your likely to learn alot going through this.

[Lajazz947]

It definitely has a note attached so I have made it as " Legal " as possible.

[Priceless ProSe]

If the car was bought with money a friend loaned to you then was there some type of paperwork listing the car as security for said loan? If not then wouldnt the associate be considered an inside creditor with an unsecured claim against you? In this case I think if the exemptions dont cover the car (were talking chap 7 of course, for now) the trustee would take it and sell it for distribution to creditors.

Not to put you off, but this case seems like theres alot of stuff the trustee will want to look at. Income way above state median, large amount of unsecured debt, payment to inside creditors, loans on property that would otherwise be taken, and pending litigation. This obviously doesnt mean anything, but you should defenitely be prepared to provide alot of paperwork to the trustee and listen carefully to your lawyer. Be prepared to prove all the expenses you list that you claim brings you within the means test, be prepared to show paperwork for loans and payments to associates, etc, etc.

I personally dont know about the trustee waiting for a court decision, but there has to be a reason they ask several times when filing if you have pending litigation against someone, I personally would wait outside your house till the cows came home for 300k! The cynic in me thinks perhaps you are trying to wipe out your debt now in preparation for a 300k payday. Thats not meant to be offensive or accusatory, but if I can think it whos to say the UST wont. Make sure you are honest in all your dealings with the court, trustee and lawyer, that way they wont have to think such things. If you let them know about the litigation the worst thing that can happen (in regards to this specific matter) is they will postpone until you got the money and distribute it to the creditors. But at least you wont have to worry about your creditors coming after you while you wait for the decision. I think the old saying "prepare for the worst and hope for the best" is a good one.