The Significance of Closing an Asset Case

[justbroke]

Soooo.....If the Trustee objected to an exemption on an asset and listed "possible assets" in his 341 report, but has done nothing else, no report of assets, no report of no distribution, and the timeline has passed for anyone to object to the discharge, is the case held open or is it automatically closed?

The case is held open. However, the discharge should be entered. However, some Districts will hold the discharge until an "interim" report or a no asset distribution report is issued.

If there are actual objections to exemptions, this will prolong the closing of the case. There would need to be a hearing on the objection to claim of exemptions (unless your District uses negative noticing and you don't file an opposition to the objection to claim of exemptions). This is just procedurally how it works.

Typically, this type of objection -- for exemptions -- is handled pretty quickly unless it gets dragged out into a more complicated contested matter.

[GIn]

"I don't think there is any time period, it just needs to be done before closing" Soooo.....If the Trustee objected to an exemption on an asset and listed "possible assets" in his 341 report, but has done nothing else, no report of assets, no report of no distribution, and the timeline has passed for anyone to object to the discharge, is the case held open or is it automatically closed?

[justbroke]

Dear Justbroke, Does the Trustee have a time limit by which they must file either a Report of no Distribution, or a "notice of assets" determining whether the case is a no asset case or an asset case? Perhaps 30 days after the conclusion of the 341 meeting?

I don't know. It is true that the Trustee can make an otherwise "No Asset" case become an Asset case if they "find" assets. You must remember that it is in the (Panel) Trustee's BEST interest to adjudicate the case quickly! Otherwise, they are wasting money if it's a no asset case!

I don't think there is any time period, it just needs to be done before closing. Typically, the Trustees make an asset determination pretty quickly. You should know by or at the 341 Meeting -- or shortly thereafter -- if you're an asset case or the Trustee is reviewing your assets and/or exemptions.

[filed]

...In a "No Asset Case" the Trustee files a Report of No Distribution and "abandons" all assets of the case. So, at discharge, the Trustee has effectively abandoned all property and the automatic stay is lifted.

If the Trustee filed a "notice of assets" and potential distribution, this makes it an "Asset Case"...

Dear Justbroke, Does the Trustee have a time limit by which they must file either a Report of no Distribution, or a "notice of assets" determining whether the case is a no asset case or an asset case? Perhaps 30 days after the conclusion of the 341 meeting?

[stanpendula]

Des,

thank you. It helps. I actually wanted to have it removed from bk estate and by doing that to give green light to BofA to start the foreclosure. But it seems that anyway (trustee / BofA) it takes a long time, so I will keep paying my dues.

SP

[despritfreya]

We owe on the house 600k and the house is valued at 350k. (The 1st mortgage is for $350k and the 2nd is for $250k) We abandoned the property, but we have to pay HOA and other fees. So, I should ask my. . .attorney to file a notion of abandonment??

1. If you are thinking that by an abandonment you will end your liability to the HOA, your thinking would be wrong. All an abandonment does is remove the property from the bk estate. The property will remain in your name until it is either sold by you (or the trustee) or foreclosed upon by the 1st mortgage. Once the property is out of your name your obligation to the HOA ends.

2. If you are thinking about an abandonment so that you can attempt a short sale, your thinking would be correct. You cannot sell the property without a court order until it is removed from the bk estate. If this is the case the first (and cheapest) thing to do is to request that the Trustee file a Notice of Abandonment.

Hope this helps.

Des.

[stanpendula]

Have you (or your attny) called the Trustee or his/her attny and asked that he/she issue a Notice of Abandonment for the upside down residence?

As to the actual Motion, there is no specific form You are just asking that the property be abandoned as it is burdensome and of inconsequential value to the estate. The Motion must be noticed to all creditors:

http://www.azb.uscourts.gov/Documents/Local_Rule_6007-1c3_Form.pdf

Once the 14 days (plus 3 for mailing) are up, and assuming no one responds, you file a Certificate of No Objection and request that an Order approving the Motion be signed by the Judge. Please note that the fee to file the Motion is $150.00.

Des.

This is a very interesting suggestion. We owe on the house 600k and the house is valued at 350k (but the principal is 350k and HELOC is the difference - is borderline upside down, the Trustee might try a sale). We abandoned the property, but we have to pay HOA and other fees. So, I should ask my incompetent attorney to file a notion of abandonment?? hmm...

My case started as a No Asset, but the Trustee found so many ways to take money from us (due to the same attorney and his filling advices) that now we are in a settlement plan and we were declared an Asset case 2 days ago (at least this is what I saw in PACER). We got the discharge in July, but 2 days ago the Trustee sent the Notice to the creditors. Man, it's raining claims since then !!

It seems that I am in for the long wait due to the change in case status ... and today I wanted to sell my old junk car and get a newer one. Thank you for enlightening me (again) and stopping me from doing a stupid thing.

[despritfreya]

I am an asset case. Discharged in June 2010. Have been denied twice for a HAMP loan modification, partly due to mortgage co. insisting I am in active bankruptcy. The TT not abandoning the assets is an ongoing financial burden.
Can I file a motion to compel abandonment or does this need to be done by an Atty.?
If it is DIY where do I go for instructions and forms?

Have you (or your attny) called the Trustee or his/her attny and asked that he/she issue a Notice of Abandonment for the upside down residence?

As to the actual Motion, there is no specific form You are just asking that the property be abandoned as it is burdensome and of inconsequential value to the estate. The Motion must be noticed to all creditors:

http://www.azb.uscourts.gov/Documents/Local_Rule_6007-1c3_Form.pdf

Once the 14 days (plus 3 for mailing) are up, and assuming no one responds, you file a Certificate of No Objection and request that an Order approving the Motion be signed by the Judge. Please note that the fee to file the Motion is $150.00.

Des.

[branainaz]

I am an asset case. Discharged in June 2010. Have been denied twice for a HAMP loan modification, partly due to mortgage co. insisting I am in active bankruptcy. The TT not abandoning the assets is an ongoing financial burden.
Can I file a motion to compel abandonment or does this need to be done by an Atty.?
If it is DIY where do I go for instructions and forms?

[boomerkae]

Wow - I am looking like an asset case (that's what the trustee is calling me now at least) and didn't know it could take so long. For those of you owing 10K - how in the world did you come up with the money?

[CCsAreEvil]

Yeah, our case is still open after 1 1/2 years now. We filed in Sept 2009. Creditors did file claims but that all happened around Aug 2010. Only thing they got was our tax refund. I really can't believe how long it takes for an asset case to take its course. Still waiting for that final "close" status.

[angles]

Thanks for your reply aandjw.

[aandjw]

Aandjw, I don’t have an answer for you but it appears that we are in the same boat as you but further behind. Based on your experience what was the process the trustee used to ask for the 10K? Did you own all the assets and it was simply a buy out....and did you negotiate the amount you would pay?

I would not be nervous because at this point the Trustee has what he wants and is now in the distribution phase. He is basically done looking at you and is moving on.

We were going to negotiate with the trustee, but his offer was $10K, and one asset by itself had that value to us - so to get him to abandon ALL interests it was well worth it (he was looking at my business and monies that were in trust for clients - getting complicated and messy). This was a nit-picking dude - I guess I understand it because he has many people that he is responsible to - but it was very scary - 3 times in front of him. We nick-named him Mr. Poopy Pants - it was appropriate.

I guess I am just really jumpy about all this - 1 year since filing - and no final report.....

[angles]

Aandjw, I don’t have an answer for you but it appears that we are in the same boat as you but further behind. Based on your experience what was the process the trustee used to ask for the 10K? Did you own all the assets and it was simply a buy out....and did you negotiate the amount you would pay?

I would not be nervous because at this point the Trustee has what he wants and is now in the distribution phase. He is basically done looking at you and is moving on.

[aandjw]

We are awaiting a final report in an asset case - we filed in February 2010, turned into an asset case, paid the trustee $10K for the questioned assets, and that agreement was approved by the court. Discharged in October 2010, and the last filing was a notice of what the trustee wants for his time (that was February 7th). When will I see (or will I see) I final report from the UST? and the money out to the unsecured creditors? Just nervous......