Filed Chapter 7: 06/09/09
341 Meeting: 07/16/09
Last day to object: 09/14/09
We took out a windows loan (~$10,000) for our house with First Mutual Bank in April of 2006. They filed a breach of contract lawsuit against us on this loan but never got a default judgment due to the fact that we filed for Chapter 7. Our 341 was smooth with no issues at all. No activity on pacer at all since our 341.
But our attorney called today saying that First Mutual was considering suing us in bankruptcy court because they believe that we overstated our income on the loan application by $1,700 per month. They get the figure by comparing what we stated in 2006 and what we made in 2007 (Tax Returns part of bankruptcy filing). They are pretty much just basing this off my wife’s income as a teacher saying that it should be a steady income and why does it show less in 2007.
I can remember filling out this application out on our back porch... we pretty much just guessed at our income as the guy was pressuring us to fill it out that day. There was no intent to defraud or whatever they are claiming. We put down $66,000 as my wife’s income on the application. Going back to check our tax returns she made:
2005: $58,500 (overstated by $7,500)
2006: $54,000 (overstated by $12,000)
2007: $45,500 (overstated by $20,500)
We took the loan out in early 2006 so her income was running around that $58,000 at the time... so it doesn't seem like we were all that far off with our guess. Our daughter was born in late 2006 and she ended up taking a few months of unpaid leave which drove down her income in late 2006/2007.
So the lawyers for First Mutual are saying they are giving us a chance to show them why our income in 2007 is lower than what we said it was in 2006. They are asking for copies of our 2005 and 2006 tax returns. Our attorney says this is outside of the scope of our retainer for the bankruptcy so it would cost us to have them deal with it.
Not really sure what we should do here. You guys have any advice on this. Does their threat of a lawsuit due to overstated income hold water or are they trying to push for some kind of settlement or what?
Thanks in advance!
341 Meeting: 07/16/09
Last day to object: 09/14/09
We took out a windows loan (~$10,000) for our house with First Mutual Bank in April of 2006. They filed a breach of contract lawsuit against us on this loan but never got a default judgment due to the fact that we filed for Chapter 7. Our 341 was smooth with no issues at all. No activity on pacer at all since our 341.
But our attorney called today saying that First Mutual was considering suing us in bankruptcy court because they believe that we overstated our income on the loan application by $1,700 per month. They get the figure by comparing what we stated in 2006 and what we made in 2007 (Tax Returns part of bankruptcy filing). They are pretty much just basing this off my wife’s income as a teacher saying that it should be a steady income and why does it show less in 2007.
I can remember filling out this application out on our back porch... we pretty much just guessed at our income as the guy was pressuring us to fill it out that day. There was no intent to defraud or whatever they are claiming. We put down $66,000 as my wife’s income on the application. Going back to check our tax returns she made:
2005: $58,500 (overstated by $7,500)
2006: $54,000 (overstated by $12,000)
2007: $45,500 (overstated by $20,500)
We took the loan out in early 2006 so her income was running around that $58,000 at the time... so it doesn't seem like we were all that far off with our guess. Our daughter was born in late 2006 and she ended up taking a few months of unpaid leave which drove down her income in late 2006/2007.
So the lawyers for First Mutual are saying they are giving us a chance to show them why our income in 2007 is lower than what we said it was in 2006. They are asking for copies of our 2005 and 2006 tax returns. Our attorney says this is outside of the scope of our retainer for the bankruptcy so it would cost us to have them deal with it.
Not really sure what we should do here. You guys have any advice on this. Does their threat of a lawsuit due to overstated income hold water or are they trying to push for some kind of settlement or what?
Thanks in advance!
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