Meansno, Discharged, Closed...NOW UST Audit

[drowningNIL]

Hi everybody...well it's a bummer I'm back starting my own S.O.S thread again....I figured I was done and had just been popping back on once in a while to congratulate other discharged members.

2010 was a b*tch. The BK thing and then in the midst of that my son diagnosed with a chronic illness - and then I thought 2011 brings some hope as we did receive our discharge late in December a couple days past the 60 day mark. But the saga continues.....

Yesterday (of course on a Saturday )we received a letter in the mail from the office of UST. The audit they contracted for to be done on us was never completed due to us not supplying requested documents...we NEVER got any request for additional documents. The same letter we received was a cc of the letter sent to our attorney's office. Hope to God he is there tomorrow morning to get his.

A couple months ago I had seen this audit issue on Pacer (flagged AUDIT - NO CLOSE) and contacted the attny regarding it and he said no worries he'll take care of it...he said they already have everything they need yada yada. I hadn't gone back to Pacer since the conversation with the attney re the missing info because seeing it all made me so tense and he said it's a mistake he's going to fix it....well so after getting the letter yesterday it seems they did not have all the info they need and are continuing with the audit even though we are discharged and closed.

Now looking at Pacer, I see that mid November they posted "Report of Audit unable to complete" yet 12/20 we got a discharge and 12/23 case closed. So...WTH? How can they do this? It's like double indemnity....we were given a discharge - have that letter in a file - case closed, yet NOW they want a bunch of extra info before Jan 2* or they can revoke our discharge/!?!?! Seriously? If it mattered so much why did they discharge us?? Seems really half a@@ backwards.

I feel on the brink of a nervous breakdown. With all the home & family stress and then having the feeling of RELIEF that at least this BK was done and behind us and maybe we have something GOOD to come...and now all over again?!? I just don't understand how or why they would or can do this.

Drowning AGAIN in IL

[justbroke]

Please relax and wait on your attorney. I have never read anywhere in the bankruptcy code that an "audit" can hold up a discharge (period). The only thing that can hold up a discharge is a complaint to determine dischargeability or the Trustee complaint to dismiss under 727, 707, or some other part of the code.

Since they didn't file anything within the window, the only thing they can do is seek to vacate or revoke the discharge order. The only way to do this is to prove the you received the discharge through fraud.

So, what I'm saying is, that the UST is entitled to audit even post discharge and close. If they find anything fraudulent, then they can motion the court to revoke the discharge. That's true even without the audit.

It could get interesting though. Say you didn't fraudulently receive a discharge, but your DMI was miscalculated and was $200.50 a month (and not less than $182.50/month). The argument from the UST would be that you weren't entitled to a discharge, but a discharge can only be revoked if " such discharge was obtained by the debtor through fraud and the requesting party did not know of such fraud until after such discharge was granted". The UST's inability to do their job is not fraud on your part.

I've seen a case where the UST tried to revoke a discharge after the fact when they discovered late that the debtor had too much DMI. The court didn't buy it, stating that the UST should have filed a motion to extend the deadline to determine dischargeability and that the discharge bar date has passed and his late motion is time barred!

I'm sure your attorney will just tell you to relax and let them do their audit. So long as there is no fraud, you have no worries in my book.

[drowningNIL]

thanks jb but i am just so confused, aggravated, and sick about this. seems to me if they were going to continue with the audit and look for something - why did they discharge AND close the case ???? - there is nothing past 12/23 on Pacer either..nothing about any continued audit or this letter sent out a few days ago. just discharged and closed. I feel like the ust office was careless the way they went about the timeline of our bk. knowing the audit wasn't complete yet telling us we were discharged. As far as we knew it was all finished and wrapped up.

From the letter, the office of the ust is now taking over the audit since we "did not comply with the auditing firm's request for docs". and I stand by we never received anything from anybody wanting more info until this letter yesterday.... I am sure the attny will say no worries. That's his standard answer. ;-/ but i AM worried of course...to think the BK was all over and then it's dredged up again . Makes me ill. They now want 6 months bank statements - and that makes me uncomfortable. They had our 2 previous years tax returns and my husband's payroll stubs for 6 months but now they asked for 1 more. They want all info re our retirement accts and other funds and ira info. On the bank statements they want any credits over $500 annotated....is that the norm? I thought it would be any withdrawals over $500 they'd be curious about. I just wonder what they are looking for and I worry about our explanations opening more cans of worms.

When will it really be done?? I thought discharged and closed meant DONE - Bring out the hampsters and dance for joy it's over.... More sleepless nights ahead.

Drowning

[justbroke]

Well, unfortunately and hyper-technically, discharged and closed only closes the case for non-fraudulent activity or un-administered assets. I think there may just be some confusion over the third-party audit and I'm sure your attorney and the OUST (Office of UST) will straighten it out.

If there's nothing there, there is nothing there. Unless they find actual fraud, you have nothing to worry about at all. Provided that you have a good attorney who is willing to FIGHT and litigate against the UST.

[tyson24]

I am so sorry Drowning...I hope everything works out for you.

[drowningNIL]

thanks. I just feel so overwhelmed right now.

[mommi2many]

drowning--this is just terrible. My heart goes out to you. You are in my prayers. All will be well very soon. You gotta believe.

[chicagoannie]

Drowning- I hope everything gets sorted out quickly for you. I can understand your stress and anxiety, especially after getting the discharge. What a mess!

[tobee43]

me too drowning... i'm sooooooooo sorry this is happening to you ahhhhhhh....


i would listen to what jb is saying here....and i understand it may not make you feel wonderful at the moment, but i believe what he says and you'll be fine!

[debee]

I agree. No fraud, no worries. Just remind yourself of that every time you start to feel stressed out.

[tcreegan]

Hang in there drowning !! This sounds like bureaucratic bungling by the UST, they must need more paper to push around.....

Your discharge & close then UST audit sounds like a kid at Christmas getting a wonderful toy....that gets taken away after New Years...

Hang a picture of the UST next to Scrooge and the Grinch......

Tom in Colo

[ValleYum]

Awww drowning... Ugh. Big hugs for you.

My first thought was the robotic one of a former accounting clerk: "Must have complete audit to check the box for government. This is a recording."

Hopefully, this is the case and it is simply that you give them the papers they wanted and they can consider it *Complete*.

I wish I could email you a Valium.

[drowningNIL]

thank you all for the support...and valium honestly i feel like i need it.....

my husband put a call into the attorney's office this morn - they have not received the letter yet. Ours is a copy of theirs so they proably will tomorrow but he only spoke with the secretary and she was shocked - their office has us closed out and our files ready for pick up. She thought that's why he was calling to arrange to get them. When he told her about the letter she said they shouldn't have discharged us then. (that's how we feel) We are waiting for the attny to call back. Crazy.

ValleYum, I have that same hopeful thought in my head. Maybe they just need the papers/info in a file to call it complete. ??

Thanks, guys. I will let you know.....

[drowningNIL]

Still waiting...... no call back today. If not by tomorrow afternoon the office will be getting another call.

I am hoping this whole thing is some wacky clerical error. I have been googling a lot the past day. The audit should have been completed before the case was closed. Yes they may have discharged us in a timely manner but then they could have (should have) kept the case open until all their administering was finished....then closed it. That seems to be the way it's normally done. Sounds like these cases are rarely reopened unless they suspect fraud of some type..and that is not us.

I am feeling better about it but it would be nice to have the attorney touch bases with us & hopefully get this cleared up.

[wsy]

Drowning, Your attorney may not be telling you everything. Sounds like you were referred to an outside agency for the audit and only was asked 6 months of records. This is a random audit and YOUR attorney was notified. If it was a fraudulent audit the UST does it inhouse and would be asking you for 1-2 years of records including credit card statements.
They sent your attorney an email or letter that states the audit from the ust and on that form there are check boxes whether they can contact you directly or not. There are also check boxes for the info they want usually for random its 2 years of tax return with all schedule, every bank statement from the time you file and 6 months before. Since there was no compliance and the UST takes over the audit now its a little on the fraud side. They want an explanation for any credit or deposit over 500.00. They do not care about withdrawals because on my statements I had MULTIPLE LARGE withdrawals and was freaking out about them but they didnt care.