Can trustee require current financials - 18 months post discharge (Chap 7)

[despritfreya]

Yes - that is the HUGE question we've been trying to get answered. The fact that he is wheeling and dealing is not right, but not the most objectionable part of this. Blocking the short sale is not our objective. Truth be told, I'd like to see the house enjoyed by a new family, but we don't want to assist in this process and feel that we have a right to post-petition privacy.

11 USC §521 - Debtors duties. . .

The debtor shall

(a)(3) If a trustee is serving in this case. . . cooperate with the trustee as necessary to enable the trustee to perform the trustee’s duties under this title.

(a)(4) If a trustee is serving in the case. . . surrender to the trustee all property of the estate and any recorded information, including books, documents, records, and papers relating to the property of the estate. . .

11 USC§704 - Trustee’s duties

The trustee shall

(1) collect and reduce to money the property of the estate for which such trustee serves and close such estate as expeditiously as is compatible with the best interest of parties in interest.

(2) be accountable for all property received. . .

(4) investigate the financial affairs of the debtor.

The Trustee’s duties are broad in that there is no limitation to the requirement to “investigate the financial affairs of the debtor” and there is a duty place upon the debtor to “cooperate with the trustee”. However, I cannot imagine that Congress meant this to be on-going duty since the number 1 duty of the trustee is to “close the estate” in an expeditious manner. Allowing a Trustee to hold a debtor hostage just smacks of being “unconscionable” and completely against the public policy (and Court directive) of allowing a debtor to obtain a “fresh start”.

Des.

[keepsmiling]

So can freeatlas tell the realtor to POUND SAND???? lol, where's that banner....

I really hope so ....
I was thinking the exact same thing that Des said... what this could potentially imply for EVERY Ch 7 debtor... could this be what the backlash is from the 2005 act not going quite as well as the banks planned? Scary thought.....

I hope this smarta$$ trustee gets hit up but good with a major investigation SOON.

[freeatlast09]

11 USC §521 - Debtors duties. . .

(a)(3) If a trustee is serving in this case. . . cooperate with the trustee as necessary to enable the trustee to perform the trustee’s duties under this title

Thanks again Des.

I guess this is why the real estate agent keeps saying "you must cooperate". I do get that, but since the Trustee is selling property of the estate (not our property) we think he needs to explain this to BofA and work it out with them. Since the requested documents from us are irrelevant to the sale, is not supplying them considered not cooperating? In our opinion, BofA is the one not cooperating and they have quite a bit to gain by avoiding a foreclosure. It's no wonder that bank is such a (use your own favorite phrase here).

Just because BofA has something on their list for short sales, do we all just have to obey them no matter how irrelevant the request? That will be up to a judge because we plan to fight this all the way to a hearing if we have to.

More posts later...

[keepsmiling]

Isn't cooperating with this scandal some kind of (innocently) abetting criminal behavior? This whole thing is insane. Dh says the 15K must be on the RESPA and that the bank would never (or SHOULD never) agree to it.

Any word from your lawyer yet, free? For this I'd be camped out on the doorstep....maybe he is itching to be part of making some kind of case history ... this sounds like kind of landmark stuff going on here!

[freeatlast09]

No word from the attorney yet. He is in court today, so we're not hopeful for a response until tomorrow. We probably would camp out on his doorstep, but we live a couple of hours away now.

Yes, you'd certainly think he'd want to be a part of this wouldn't you? I guess we'll see.

[freeatlast09]

Well… finally heard back from our attorney and here’s what we were told.

His recommendation: give up the documents and play along.

His take on it: the Trustee has a right to look at post-petition financials to see if you lied about your income or had large deposits after discharge etc… Basically looking for fraud. We explained that the actual Trustee is not requesting these documents as part of any investigation, but rather BofA wants them. He understood that, but said the Trustee would use that pretext to compel them anyway. He said he has litigated this type of situation before and the judge ordered the financial documents to be turned over to the Trustee. His guess was that we’d probably spend $1,000 to fight it and end up losing anyway.

On the $15k side deal: We told him we thought this was pretty shady, but he disagreed. He called it an Offer in Compromise – a deal between BofA, himself and the buyers. Since the house ‘technically’ has no equity, our exemption would not apply. He said any deal would have to be approved by the judge and he didn’t think the Trustee would be doing anything illegal. (I never said it was illegal and don’t suspect it is: unethical? Oh yeah!) He also mentioned that we would get a copy of the sale order and could still object if we saw anything shady.
So… bottom line, he’s ready to file motions and appear in court, but it will cost us quite a bit and odds are we’ll lose.

He has yet to receive any formal communication from the Trustee, but will let us know when he gets something.

That’s all we know at the moment.

Time for a few aspirin.

[JEM]

IMO, it sounds like your attorney is caving.

[keepsmiling]

This sucks at every conceivable level-- except, of course, for the tt and his realtor pal

[keepsmiling]

Some hotshot lawyer needs to take on this and all previous similar cases or this will spread like wildfire to the rest of the country and hurt way too many unsuspecting folks. Wonder if this tt is blogging/bragging about this?

[freeatlast09]

Followed up with 1 question for our attorney.

Question: Wouldn't there have to be a suspicion of fraud to compel post-petition documents?
Answer: "There does not need to be a suspicion of fraud. It is enough for the proper administration of the estate to require a disclosure. The proper administration of the estate can include a short sale with turn over of records to BofA"

So I guess one of the banks responsible for ruining us financially (& many other people) continues to have control over our life. Ain't life grand?

[CoBelle]

It sounds to me like your attorney doesn't want to mess up HIS relationship with the trustee...You are a done deal as far as your attorney is concerned; if HE plays along, he will have an easier time with the trustee for his active cases. To me, that's what's wrong with all of this. In order to fight what might be a way crooked deal, you have to spend a lot of money to hire an attorney to fight for you. I'm definitely jaded because of what I have been dealing with, but I'd hoped that bk /federal court would be less crooked than what I've experienced in state court.

You could always file the motion yourself I guess.

[freeatlast09]

It sounds to me like your attorney doesn't want to mess up HIS relationship with the trustee....

You may be right. Even if we have him file motions, attend hearings etc... , would we get 100% effort since its contradictory to his advice? I don't know. We really feel stuck here. We haven't been this stressed since filing in 2009.

[pathfinders]

Wow, Sorry for all your trouble

[despritfreya]

Well… finally heard back from our attorney and here’s what we were told. His recommendation: give up the documents and play along. His take on it: the Trustee has a right to look at post-petition financials to see if you lied about your income or had large deposits after discharge etc…

Sorry to say this but your attorney has no "balls". Yes, a Trustee can look at financial information to see if there is any fraud, BUT, TWO YEARS LATER, come on. And, where is the fraud? It is the Trustee who is trying to skim money off of the sale of what is otherwise underwater property. This truly takes us down a slippery slope if Trustees can get away with this.

While I suspect you will play along due to the attorney's advice, and I cannot fault you for that, I would want to know if, in the case he claims he has handled, the debtors were 2 years beyond discharge.

Very, very sad.

Des.

[freeatlast09]

Sorry to say this but your attorney has no "balls". Yes, a Trustee can look at financial information to see if there is any fraud, BUT, TWO YEARS LATER, come on. And, where is the fraud?

Hey Des - that's what we thought too, but followed up with a question about non-fraud docs and his answer was: "There does not need to be a suspicion of fraud. It is enough for the proper administration of the estate to require a disclosure. The proper administration of the estate can include a short sale with turn over of records to BofA"

We aren't sure what to do - I'm no attorney so - yes - we'd like to think we're getting sound advice when we ask him a question. I guess the only option is to find another attorney with some more guts? ... or roll over and play dead. All hail BofA?!?