Over Median = UST involvement/fraud suspect?

[coolmom04]

If you are over the median income, does that automatically mean the UST will get involved? We're over by 8K.

[LALADY]

I am over median. UST is involved.

[HHM]

Yes, if you are over median, the UST gets involved. It is the job of the UST to oversee the integrity of the BK system. The are the ones make an initial review if someone who files a chapter 7 should actually be a chapter 13.

[StartingOver08]

Just because the UST gets involved, it does NOT mean you are suspected of fraud! It means they think you can afford to make payments in a Ch 13. AND just because they show interest, it does not mean that they successfully convert every case from a Ch 7 to a Ch 13 (or dismiss a large proportion of cases).

[tlcabk]

We Filed Ch7 and we're well over the median for our state, but our DMI was negative and we didn't even claim every expense penny we could have. There was a UST at our 341 but he was there for the lady in front of us and then he got up and left. I saw on Pacer that our Trustee has entered his findings 'Report of No Distribution ' (no asset case) and asked to be finished with our case.

Would that mean the UST has no interest in our case and we just wait out our 60 days for discharge?

[justbroke]

Would that mean the UST has no interest in our case and we just wait out our 60 days for discharge?

The (Panel) Trustee and United States Trustee (UST) are two different roles/people.

The panel Trustee (commonly referred to as the Tee or Trustee) administers the case. They are the ones who run the 341 Meeting, and attempt to find assets for liquidation.

The United States Trustee (UST) is responsible for the overall Bankruptcy program for a specific Region of the United States. They are not too dissimilar to a United States Attorney. Their job is to administer bankruptcy cases in accordance with the law. Their primary job in a Chapter 7... is to, literally, push as many people into Chapter 13s as they can. To do this, they generally have "trigger" points (or red flags), that will make them interested in a case. Generally speaking, the triggers appear to be a.) over the median income, b.) near or over $100K in unsecured debt (or some debt-to-income ratio), and/or c.) schedule J shows disposable income creating a presumed abuse at least $104.58 and no more than $182.50.

So, to your specific case, the panel trustee is just saying that there are no assets to administer. This really has nothing to do with qualification for a discharge in Chapter 7. The next thing you wait for is 10 days after your 341 Meeting. That's the time in which the United States Trustee (UST) must file a statement of a presumption of abuse. If the UST doesn't file that, you are generally good to go!

[LALADY]

Hello.

Ten days or ten business days?

Thanks much!

[tlcabk]

Yes, and the UST got up and walked out just before our name was called to speak to our Panel Trustee.
The UST did ask many questions of the lady in front of us. But appeared to have no interest in us. Is that a good sign (I'm hoping yes).

We met 2 of the 3 cirteria you mentioned above. The exception was Our Schedule J line 20 was belwo 50 $ due to spouse having to take employment at 1/4 of what he had been earning just to have income (unemployment benefits in our state is very low)

So if we had our 341 on 12/4 is it 10 calendar days or 10 business days? Also could it take longer like the discharge and closing? Or is it a 10 day deadline for them to file (I'm assuming this is a deadline since you stated they MUST file a Presumption of .....)

[justbroke]

Yes, and the UST got up and walked out just before our name was called to speak to our Panel Trustee.
The UST did ask many questions of the lady in front of us. But appeared to have no interest in us. Is that a good sign (I'm hoping yes).

If the UST's attorney/representative didn't talk to you at the 341 Meeting, then that's a very good indication that the UST's office is not interested in your case!

We met 2 of the 3 cirteria you mentioned above. The exception was Our Schedule J line 20 was belwo 50 $ due to spouse having to take employment at 1/4 of what he had been earning just to have income (unemployment benefits in our state is very low)

Interesting that you are over-the-median and have more than $100K in unsecured debt. Perhaps it's medical debt... they usually go easy on people with high medical bills.

Ten days or ten business days?

So if we had our 341 on 12/4 is it 10 calendar days or 10 business days? Also could it take longer like the discharge and closing? Or is it a 10 day deadline for them to file (I'm assuming this is a deadline since you stated they MUST file a Presumption of .....)

It's 10 calendar days. However, if the 10th day falls on a weekend or court holiday, the due date is the next available day that court is in session.

[tlcabk]

Oops, sorry we meet 1 of three. I missed the word "unsecured" I was counting all debt including house and vehichles (2 we kept one was voluntarily surrendered).

Spouse has multipe health issues that cost a significant amount of money monthly to address and stay on top of.

Thanks for the info.

[coolmom04]

Thank you all for the info.

So you won't know if the UST is going to get involved until at least 10 days after the 341? Am I understanding that correctly?

[justbroke]

So you won't know if the UST is going to get involved until at least 10 days after the 341? Am I understanding that correctly?

Usually, the UST will have already contact you or your attorney prior to your 341 Meeting. The latest that the majority of people find out of the UST's interest, is at the 341 Meeting. The UST isn't trying to ambush your case, so they try to let you or your attorney know as soon as they have issues with your paperwork, claims of exemptions, and/or eligibility for a Chapter 7 discharge.

The 10-day post 341 Meeting thing is just a milestone by which the UST must file a statement of abuse. It's just one more date that passes, that allows you to breathe easier.

Realize this... that upwards of 90% of Chapter 7 cases pass through with no UST interest in the case.

[tlcabk]

JustBroke: I just wanted to thank you for taking time to help those of us newbies to this arena.

[coolmom04]

So when the UST gets involved, what sorts of things do they ask for... or will they even necessarily ask for anything? Is it just on a case by case basis? So if we are $7K over the median and have a negative DMI by around $100 and schedule J meets my state's allowances.. would they want more bank statements, tax returns, etc? (I don't care if they do - nothing to hide - just want to make sure I know where all of it is before I even go to the attorney).

[coolmom04]

JustBroke: I just wanted to thank you for taking time to help those of us newbies to this arena.

Oh my gosh! Yes... thank you thank you thank you!!! You have eased my mind time and time again!