Received Letter

[nohope]

Received a letter from the bankruptcy court that the date for filing a claim has been extended to 8/23/11 (original date to file was 5/17/11) as "there appears to be assets". I always said there were assets. Why is a letter like this going out now, two months after the 341 meeting?

[nohope]

Is this letter common? Why would the Court send it out?

[LadyInTheRed]

They send the letter out to let creditors know your case is an asset case and to give them an opportunity to file claims. If your case was an asset case from the start, I am not sure why they would extend the deadline. Somebody with more Chap 7 experience than I will know more.

In any case, the extention of time to file claims should not hold up your discharge.

[freeatlast09]

I don't believe it has anything to do with the time to file an objection. It's the Claims Bar date - the deadline for the creditors to file a claim so they can get a piece of the pie. Creditors usually have 90 days while the government gets 180 days.

[tobee43]

I don't believe it has anything to do with the time to file an objection. It's the Claims Bar date - the deadline for the creditors to file a claim so they can get a piece of the pie. Creditors usually have 90 days while the government gets 180 days.

exactly! and as stated by one of the PP it should not hold up your dishcharge...or hopefully, most importantly, the close.

[nohope]

The letter says:

It appeared from the schedules when this case was instituted that there were no assets from which dividends could be paid to creditors and notice of initial meeting of creditors so indicated.

I have NO idea why and where that idea came from - petition indicated equity in the house.
Hasn't the discharge already been delayed -they've given the creditors an extension to make a claim (only one creditor made a claim before the first deadline).

I don't see anywhere on the first letter to creditors that there were no assets.

[LadyInTheRed]

Hasn't the discharge already been delayed -they've given the creditors an extension to make a claim (only one creditor made a claim before the first deadline).

The creditors and trustee have until 60 days after the 341 meeting to object to discharge. If there are no objections and the deadline to file objections has not been extended, you can be discharged even if the deadline to file claims has not passed. How much money is available to creditors and how that money is divided among the creditors has no bearing on your discharge. That can all be taken care of after you are discharged.

[debee]

Discharge is the goal of bankruptcy. Discharge has legal significance because it is the effective end of your bankruptcy. It releases you from your dischargeable debts and any assets not specifically retained by the trustee are yours again.

Case closure occurs when there is nothing left to do in the case. In a situation like yours where there are assets to sell, the case will remain “open” until the trustee finishes administering the case (that is, gather proofs of claims from creditors, sell the assets, and pay unsecured creditors).

However, closure only has administrative significance; once your case is discharged, any property not specifically retained by the trustee is yours to do with as you please and you can go about and live your life as normal. From the debtor’s perspective, it doesn’t matter when the case closes.

(note: I 'paraphrased' this from Methner's legal website because he says it better than I could.)

[nohope]

The 341 meeting was in MARCH - now the court has sent out the letter extending the deadline to 8/23/11 - it originally was 5/17/11. Now out of the blue I get this letter.

[ValleYum]

Did the BK Court send out a previous notice/letter asking the creditors to file a Proof of Claim?

What did your 341 Meeting of Creditors Notice say down towards the bottom of the first page?

Did it read like this: Please Do Not File a Proof of Claim Unless You Receive a Notice To Do So ??

If so, I would think that the letter you are referencing was simply the 'notice' mentioned above asking the Creditors to file their Proof of Claim. I think it is the Trustee's report that triggers the letter - it may have taken him a while to generate his report since he has determined you were an asset case.

[LadyInTheRed]

The 341 meeting was in MARCH - now the court has sent out the letter extending the deadline to 8/23/11 - it originally was 5/17/11. Now out of the blue I get this letter.

I was going to ask why you care so much about the letter if it doesn't affect your discharge. I looked back to your posts and see that you have significant equity in your home that will probably pay off all of your debt. You are concerned about the extension because you are hoping all creditors won't file claims, right? The fewer claims that are filed, the more proceeds of sale you stand to receive. I just thought I'd point that out for others who may be wondering the same thing I was.

I think ValleYum probably answered why this letter is being sent out now.

[nohope]

yes, the letter to creditors to file a proof of claim was sent out in February. As far as my equity and debt, I would like to be able to pay off all of my non-dischargable debt and that may not happen now. Been advised by another lawyer to convert to a chapter 13 - will that help? Every lawyer I've seen since I first hired a lawyer has told me the trustee will sell my house for far less than it's worth and I will be left still owing money...

[newbie2]

yes, the letter to creditors to file a proof of claim was sent out in February. As far as my equity and debt, I would like to be able to pay off all of my non-dischargable debt and that may not happen now. Been advised by another lawyer to convert to a chapter 13 - will that help? Every lawyer I've seen since I first hired a lawyer has told me the trustee will sell my house for far less than it's worth and I will be left still owing money...

It's a bit hard to understand what you mean by that statement (bolded). If you have non-exempt equity the trustee can sell the home to distribute that equity to your unsecured creditors. (You will receive your exempt portion from the sale.) Your debts will be discharged in the bankruptcy, except for your non-dischargable debts. Is this what you are talking about?

[ValleYum]

I think she is the most worried about significant Parent Plus loans that are non-dischargeable but not priority debt as one of her siblings co-signed them with her. Is this the major issue nohope?

Do you have the income to make payments on a Chapter 13? In a 13 wouldn't you have to pay your unsecured creditors the dollar amount of the equity you are trying to save in your house??