Chapter 11 case converted to Chapter 7, I want to dismiss it ASAP...

[afghanmaker]

Happy New Year....

My Chapter 11 case which I did pro se was supposed to stay a foreclosure but the lender won judgment on the motion to lift stay and now they can foreclose on us.

The US trial attorney in my chapter 11 case had recommend that my case be dismissed due to many issues. She filed a Motion to dismiss, and both of us didn't attend the hearing, but the assistant to the Trustee (her boss) showed up and converted this case to a Chapter 7, claimed she didn't think this case should be dismissed since I didn't do a lot of things right.

Since this just got converted (this week), how can I have this case dismissed? Should I NOT respond to any requests or attend the 341 meeting that has not yet been scheduled and have it dismissed this way. What are the implications of ignoring the new Interim Chapter 7 trustee, as one attorney friend suggested.

Again, my goal is to have this case dismissed. I have no intention discharging any of my other debts.

[HHM]

This sounds like a total mess.

Yes, most likely if you do not attend the 341 meeting, the chapter 7 trustee will most likely move to have your case dismissed. However, they don't have too. They can compel you and they can hold you in contempt of court. They can also move to deny discharge. Which means the case, and all the debts in it will NEVER be discharged and the case stays open; pretty much will have screwed yourself financially. However, that later scenario is worst case. Whether it goes that route will depend if you have non-exempt assets. If there are actually assets that the chapter 7 trustee can liquidate, he mostly likely WONT dismiss the case.

In the situation you describe, any attempt to refile BK will have limited results. When you file BK and a secured lender files a Motion for Relief, and the BK is later dismissed. A subsequently filed BK only allows for a 30 day automatic stay. So you may lose the benefit of s subsequently filed BK.

What is the big picture here...what are you really trying to accomplish?

[despritfreya]

My Chapter 11 case which I did pro se. . .

This was your first mistake.

The US trial attorney in my chapter 11 case had recommend that my case be dismissed due to many issues. She filed a Motion to dismiss, and both of us didn't attend the hearing, but the assistant to the Trustee (her boss) showed up and converted this case to a Chapter 7, claimed she didn't think this case should be dismissed since I didn't do a lot of things right. . ..

My guess is that the UST filed a Motion to Dismiss or Convert due to your failure to file operating reports, pay quarterly fees, attend the IDI, file proper schedules etc. Counsel for the UST (or the UST) showed up at the Hearing on the Motion and requested conversion instead of dismissal based upon the "best interest of the creditors" test. Since you were not there, the Judge rubber-stamped the request.

Since this just got converted. . . how can I have this case dismissed?

Sorry, but I tend to doubt your case will be dismissed. It was converted (as opposed to dismissed) for a reason. Without knowing more, I must assume that same reason will stop a dismissal by the Chapter 7 Trustee who works for the UST - I could be wrong, but this is my best assessment based upon what you have posted.

Should I NOT respond to any requests or attend the 341 meeting that has not yet been scheduled. . . What are the implications of ignoring the new Interim Chapter 7 trustee, as one attorney friend suggested. Again, my goal is to have this case dismised.

If you fail to cooperate with the Trustee you could face a 727 Complaint for the denial of your Discharge.

At this time, the best thing for you to do is to find an attorney (not your "friend") to discuss your options. If you have properly disclosed everything and do not have any non-exempt assets then maybe you can get the case dismissed. Such dismissals are rare but can happen - and usually with the blessing of the Chapter 7 Trustee.

Des.

[afghanmaker]

Thanks, and yes I agree this is a total mess.

First of all this was an individual Chapter 11 filing to avoid foreclosure of a home that was worth more than $1.5M and second, my unsecured debt is about $20K, and once they foreclose on my home both the first and second mortgages will disappear.

I don't want to discharge any of my debts, I just want this case to be dismissed. I don't have any assets and after I pay off the $20K in credit cards / bills, I am pretty much even. I just need to dismiss this case since I want to move on and will NEVER file a BK ever again.

What is non-exempt status?

I don't know why the UST attorney didn't just dismiss my case since her colleague suggested that this case be dismissed as did the judge (he commented that I shouldn't even be in BK court).

Any thoughts, since I really very worried about making this any worse.

[despritfreya]

Any thoughts, since I really very worried about making this any worse.

My strong recommendation is that you consult with an attorney. Consultations are usually free.

Des.

[afghanmaker]

Thanks, i agree and will do this but since this is a holiday weekend, I wanted some opinions.

What is the probability that the new interim Chapter 7 trustee will dismiss the case from me not showing up at the 341 meeting?

[HHM]

OMG, usually I try to be supportive, but this sounds like a case of extreme arrogance combined with utter stupidity. You filed a chapter 11 BK (the most complicated legal proceeding in all of the the legal word short of a class action lawsuit) and you don't know the difference between an exempt and non-exempt asset. Why did you file BK in the first place? BK does not "avoid" foreclosure, it only delays it. You still have to pay the mortgage if you want to keep the property. If the property is upside down in value, (worth less than what is owed), then you definitely want/need a discharge so the banks don't come after you for the difference.

Go get a lawyer, you probably screwed yourself because of your arrogance for not seeking true legal help ahead of time.

[helpmeout]

First of all this was an individual Chapter 11 filing to avoid foreclosure of a home that was worth more than $1.5M and second, my unsecured debt is about $20K, and once they foreclose on my home both the first and second mortgages will disappear.

I don't want to discharge any of my debts, I just want this case to be dismissed. I don't have any assets and after I pay off the $20K in credit cards / bills, I am pretty much even. I just need to dismiss this case since I want to move on and will NEVER file a BK ever again.

Just how are you going to pay off the $20K?

[afghanmaker]

Gee thanks for the encouraging words....no this is not a case of arrogance...this is a case of bad advise from so-called attorney's....and the fact that I made a couple of mistakes (which I'm sure you've never done in your life). Yes, I know that BK11 was complicated and now a bit too convoluted for me to follow or manage, but then again, they (US attorney and Judge both agreed that this case should have never been filed under BK). So I am somewhat baffled why the assistant to the UST is going after a conversion and how will the new Chapter 7 trustee handle the case.

I am simply asking a question of probability here, not to cut me down or make pretty insulting comments.

None of the other unsecured debts are in default, I have been paying them off on a monthly basis, again, this BK was only really targeted for protection against a foreclosure. I do have a job, so I can pay off the unsecured debts. My house once it forecloses, I will not be responsible for the difference, this is our state law.

I understand I need an attorney, which is really tough at this time, since attorney's want clean and easy cases, especially for a Chapter 7, it will be difficult finding one that doesn't want a pound of flesh, but then again, I just found out about this on Friday.

So, if you are going to comment please do consider the fact that I am reaching out here and any optimistic / realistic comments is appreciated.

[helpmeout]

None of the other unsecured debts are in default, I have been paying them off on a monthly basis, again, this BK was only really targeted for protection against a foreclosure. I do have a job, so I can pay off the unsecured debts. My house once it forecloses, I will not be responsible for the difference, this is our state law.

It is clear that you did not do any homework before you filed. If you had, you would have known that all the bank had to do to continue with the foreclosure is file for relief from the stay. Filing BK only temporarily stops a foreclosure.

You really need an attorney to get out of this mess that you put yourself in.

[HHM]

You can be in denial all you want. When high net worth individuals file BK without an attorney, it is out of ignorance and arrogance. Sorry, I can't help if you can't handle the reality.

You are simply playing a BLAME game now, for some reason you THINK the US trustee thought your case should be dismissed. Understand that the Motions filed are FORM motions. They ask for either remedy available for the indiscretion. The attorney that shows up then argues for what they really want, in this case, a conversion.

I am sorry that you may find no sympathy here, but at least you will get a sense of the gravity of the situation and stop dicking around and get real legal counsel.

[tcreegan]

Hi afghanmaker,

...a pro-se single-asset real estate Ch 11.....wow...

If I may take the liberty of reading between the lines (been reading Sherlock Holmes, sorry)...

Mortgage(s) were over Ch 13 limits so you filed Ch 11 in an attempt to save the house.

The pro-se filing went over about as well as flatulence in a church pew, so UST says get outta here.

BUT, they converted to Ch 7 instead of straight dismissal. Why?

Theoretically the reason to convert is "the best interest of the creditors" ...meaning there is some equity in the house or other non-exempt assets to distribute to creditors. Trustee won't let you dismiss, liquidates assets, pays creditors.

Alternately the conversion was out of inexperience or pity...Trustee thought they were doing you a favor, keeping your options open. You don't take the opportunity, Trustee says "Fine, see if I do you any more favors" and dismisses.

Meantime you change your mind and want out of the BK business. Why?

You have given up on the house, not wanting to do more BK paperwork you consign yourself to paying 20k unsecured debt and letting the house go into foreclosure.

Close?

Tom in Colo

[debee]

...this sounds like a case of extreme arrogance combined with utter stupidity.

I thought personal attack - like calling someone arrogant and stupid - was against the rules? Because if it's not, there are a few people I would like to call arrogant and stupid. Or is that something only moderators are allowed to do?

(eta: please note that my motive for calling them arrogant and stupid would be entirely for their own good & the good of others who have to read their arrogant and stupid posts)

[afghanmaker]

Hello Tom,

Yes, you are very close and Yes, I just want to get out of BK since my only intention was to save the home (I did file an objection to lift automatic stay but it obviously did not work). I do not have any other assets as my home was over $600K underwater. So I would like to get out of this BK..I am pretty tired of it already.

[afghanmaker]

Thanks debee...

Yes, the moderator is definitely out of line here. He repeats himself like a broken record (i.e. "get an attorney") - yes, I know this, but since I am asking questions in a forum, both his constant and insulting responses are not constructive. The whole purpose of a forum is to share ideas and provide constructive feedback, and I can't believe he's a moderator.