The Significance of Closing an Asset Case

[kw1025]

This is really starting to bother me. I was dischared Dec 2009 with a ton of underwater properties in florida, but a few rental properties i own near my home in NY. It is my intent to buy them back, but i have heard nothing from the trustee about case closing, whether he is going to abandon the, etc. The properties most likely have some equity, BUT he values keep going up and down relative to the general economy. I want to know whether i am going to have to buy these back, or what....just for planning purposes...

[backtoschool]

This is what I got from PACER on May 10, document dated May 6, 2010.

Order of Discharge in the above referenced case was entered on 4/22/10, and notice was provided to parties in interest. Since it appears that no further matters are required that this case remain open, or that the jurisdiction of this Court continue, it is ordered that the Trustee is discharged from his/her duties in this case, his/her bond is exonerated, and the case is closed.

Does it mean case CLOSED?

No, it just means that the trustee is done administering your case. You will still have to wait for all of the clerk actions such as paying the creditors, waiting for the checks to clear, etc...

[liboton21]

This is what I got from PACER on May 10, document dated May 6, 2010.

Order of Discharge in the above referenced case was entered on 4/22/10, and notice was provided to parties in interest. Since it appears that no further matters are required that this case remain open, or that the jurisdiction of this Court continue, it is ordered that the Trustee is discharged from his/her duties in this case, his/her bond is exonerated, and the case is closed.

Does it mean case CLOSED?

[justbroke]

I can't tell you how long it will take. It's up to the Trustee.

[Jan]

Funny, we are an asset case and NO creditors have filed a Proof of Claim. The last day to file was 4/29. How long will it take for ours to close and have all our cash returned to us????? I don't even think the Trustee can take a commission because no disbursements will be made....................looking forward to the return of our $$$$!

[backtoschool]

My trustee filed his final report, abandoned all my other assets, and filed his final asset distribution matrix on March 3. The cash from my assets were deposited into the court payment account to pay out to creditors the same day. I called the clerk's office to find out a ballpark date of when my case might close and they said that each creditor has 90 days to cash the check sent to them by the clerk's office. The case cannot close until each check is cashed. If the checks are not cashed any uncashed checks are voided and put back into a fund and redistributed to the remaining creditors. Since some of these checks to my creditors were for literally $2 dollars, I find this whole process rather amusing. It is costing WAY more to process my $1,000 in assets than the assets are worth when you consider the court clerk's time, etc....

I am just posting this update so it will be in the record, since many people wonder when asset cases close, and what happens after discharge in an asset case.

[backtoschool]

Its been over six weeks since my trustee filed his final report in my case and I was told that it takes over two months after the trustee files the final report of distribution for an asset case to close. The asset money has to be transferred to the official bank account and then checks to the creditors have to be cut and then they wait for the checks to clear and then file the final paper work. But once the trustee files his/her final report then the case is just waiting for a few clean up items. At least that is what I was told by my lawyer.

[justbroke]

Don't be impatient when it comes to the case closing. It's only an "administrative" task. Let the Trustee fully administer your case and don't panic. You received your discharge, and that's the thing that actually gets rid of your debt.

If, after 6 months and no additional property (including money) is due to the Trustee, then you may want to ask about the close. Unless and until the Trustee files the final Distribution report, you case isn't closing. Most Trustee offices wait at least 30-60 days after sending out checks to creditors, because they want to make sure all checks are cashed.

[bktmom28]

Can anyone let me know if it is a good idea to contact the TT or her assistant to find out the status? Were discharged on 1/12/10 and the last day to file claims for creditors was March 3rd. TT received our tax refund on March 1st and I am just wondering if it is a bad idea to contact the TT and see if she can tell us when we can expect our case to close. Our attorney warned us at the beginning of our filing that this TT is kind of a testy lady and you don't want to piss her off. Any tips on contacting the TT?

[Chapter007]

I absolutely do not see the Trustee allowing the case to be dismissed since there is a juicy asset to administer.

In the end, the Trustee wants money for the creditors, and to make their commission as well.

Thanks for the clarification. I see your point, thats why I'm trying to figure out how to take the decision out of the Trustees hands and persuade the judge to supersede the Trustees interest.

[justbroke]

You would want to revoke the discharge. You can't vacate the order unless it's within the statutory period to do so (which is 10 days, or 14 days based on the new timelines). I absolutely do not see the Trustee allowing the case to be dismissed since there is a juicy asset to administer.

In the end, the Trustee wants money for the creditors, and to make their commission as well.

[Chapter007]

A discharge received in a Bankruptcy can only be "vacated" based on fraud.

Thanks so much for this little gem. I'm going to research this some more. I just needed to know if I am asking the impossible or not in court. Now knowing that this can be done, I will continue researching to see if I can vacate the discharge & dismiss the Ch 7 filing dissolving the open case. The Trustee has been cutting an extraordinary amount of slack to the listing agent in some unethical behavior as they are "friends" from what has been disclosed to me by the Trustee himself. I'm hoping they gave me enough rope to hang them with for the judge to decide upon. I will continue to keep all posted. Thanks justbroke.

[justbroke]

He said they are more worried about recovery and so long as everything is on the table and properly disclosed there is no issue of family or friends purchasing at arms length.

Very good and I'm glad you have a "friendly" Trustee. Some down here in Florida would say, if you want it, just come bid on it at the auction like everyone else.

Theoretically can a discharged BR be dismissed? Is there precedent?

A discharge received in a Bankruptcy can only be "vacated" based on fraud.

If there is case precedent for what I am asking, I have a better shot as I can list that in the motion pro se. Anyone? I know I may be grasping at straws, but until I explore absolutely every possibility I will never know. Thanks again for the replies guys, appreciate your expedience.

There's none because you need "cause" to vacate a discharge. I don't know of any Judge, personally, that would vacate a discharge so that the debtor can reap the benefits of the discharge. The whole purpose is to provide both the debtor and creditors with relief. Finding out that it was better not to file, after the fact, in a Chapter 7, is not a good thing. You can't "easily" dismiss a Chapter 7, and would find it probably impossible for a case that is already discharged at that.

I have read cases where the discharge was vacated by the debtor, but that's to file a reaffirmation agreement, or just to allow an already filed one be considered filed prior to discharge. To revoke a discharge, it's done by the Trustee or creditors under 11 USC 727 (the same chapter granting a discharge). I see nothing that allows a debtor to do so, if it affects creditors in a negative manner. What you are proposing, inside or outside the box, seems to injure creditors.

I still see no reason you want to revoke or otherwise vacate a discharge, when the discharge has absolutely nothing to do with the liquidation of the estate? If you have an agreement with the Trustee, the Trustee can keep the estate open for a year or two in order to liquidate the property. What's the real issue? I must be missing something.

[Chapter007]

They might just not want to use you because you are too close to the transaction (not arms length). I just don't know.

Also, Chapter007, why even bother with a short sale? Who is it helping, besides you (with commission)? The parents are going to dump a $1MM+ liability on the foreclosure anyhow and will do so in Bankruptcy.

Two things, Chapter007. First, there is no way the Trustee is going to let you dismiss the Chapter 7. Chapter 7s take on a life of their own once you file If the Trustee sees a juicy asset like that home, they are going after it.

I just don't understand the need??? Make me believe.

I already submitted an offer of 950k with help from some investor friends of mine. I have been in open communication with the trustee since day 1. He is a nice guy and been very cooperative in sharing info. I was told I could purchase regardless of arm length so long as its disclosed to all parties. He said they are more worried about recovery and so long as everything is on the table and properly disclosed there is no issue of family or friends purchasing at arms length.

Theoretically can a discharged BR be dismissed? Is there precedent? I have a laundry list of errors and ball dropping up until now that have been done. I can show gross incompetence an documented unethical behavior on behalf of their listing agent.

I want to walk away from this as a short instead as I can collect a commission. That commission will go to parents living expenses as they will be completely insolvent. Mother doesn't work, she had a stroke two years ago, One year ago she had a mastectomy and cancer recovery treatments (Chemo/Radiation). My fathers business collapsed as his largest client declared bankruptcy and he lost more than $400k in accounts receivable to his business. If this happens it will be REAL BAD. Everyone else has told me to throw in the towel, but I'm the kinda guy that digs in and prepares to get bloody. I need some outside the box thinkers. If there is case precedent for what I am asking, I have a better shot as I can list that in the motion pro se. Anyone? I know I may be grasping at straws, but until I explore absolutely every possibility I will never know. Thanks again for the replies guys, appreciate your expedience.

[justbroke]

I'm sure the most important thing the trustee cares about is HIS commission off this deal. Can you please post what he gets once all is said and done. I'd guess it's going to be at least $50,000

They get 25% of the first $5,000. Then 10% of the next $45,000. Then 5% of the next $950,000, and 3% everything else.

So, at $1.4MM, they'd get about $66,000.

Now as for this sale, that Chapter007 is proposing. I see you want to benefit from the sale Chapter007. If the Trustee allows this, they'll probably negotiate your fee down (maybe to 5% if you're the listing agent as well). They might just not want to use you because you are too close to the transaction (not arms length). I just don't know.

Also, Chapter007, why even bother with a short sale? Who is it helping, besides you (with commission)? The parents are going to dumb a $1MM+ liability on the foreclosure anyhow and will do so in Bankruptcy.

Two things, Chapter007. First, there is no way the Trustee is going to let you dismiss the Chapter 7. Chapter 7s take on a life of their own once you file If the Trustee sees a juicy asset like that home, they are going after it.

I just don't understand the need??? Make me believe.