BK 7 Dismissed due to creditor on a vendetta

[SecretOC]

Hello, so i posted on the Adversary proceedings sub-forum. Well looks like the creditor got the summary judgement and also requested that my mothers case be dismissed. They claimed that she was hiding many things but could never prove it but they did bring out every mistake in the petitions (which were about 3 small ones...). Due to that her case is dismissed.

One problem was that my mother did not list herself using my bank account to pay the bills since the creditor froze her bank accounts. She started using my account 3 weeks after she filed. In her petition she said that she gets paid in checks from her work. But about 3 months into the BK her job gave her a debit card instead of check and she never updated her petition for that. I dont understand about the debit card though? All that changed was that the job is giving her a debit card instead.

Is using my bank account and the debit card a big problem? The trustee ruled no distribution and then withdrew his claim 2 weeks after the summary judgement was handed out to the creditor because they feel that there is a potential asset. Could the trustee be confused by the creditors lie's claiming that my mother is hiding an asset?

Our attorney is now filing for an appeal

[despritfreya]

her case is dismissed. Our attorney is now filing for an appeal

Hold on a minute. Her case was dismissed or was she DENIED a discharge? Big difference. If denied a discharge an appeal makes sense. If dismissed, maybe not.

Des.

[SecretOC]

Hold on a minute. Her case was dismissed or was she DENIED a discharge? Big difference. If denied a discharge an appeal makes sense. If dismissed, maybe not.

Des.

Sorry i can't tell because her attorney said her case was dismissed due to the creditor being successful in the AP on grounds of 727(a)(4)(A). Ok as i read it again they requested her to be denied.

[LadyInTheRed]

You can read that code section at https://www.law.cornell.edu/uscode/text/11/727

Sounds like the court thinks your mother lied about something during the BK proceeding. If she had money in your account on the date she filed and did not disclose that on her petition, that could be the problem. Suddenly having her employer pay her by debit card seems suspicious too. I'm not saying that she intentionally hid anything, but these things don't look good to a judge.

Your mother needs to sit down with her attorney to make sure she understands exactly what is going on.

[SecretOC]

Your mom needs to talk to her attorney to understand what is going on. Was her entire discharge denied, or only a discharge of the one creditor's debt?

As far as your mother using your checking account is concerned, if on the date of filing she had her money in your account and didn't report it as an asset, then that's a problem.

The creditors requested that not only their debts be denied but all creditors debts be denied as well. At the time of her filing she did not use my account nor was her money in it, she started using it about 3 months after filing due her account still being frozen.

Thank you for answering

[LadyInTheRed]

Hmmmmmm, those post-filing events shouldn`t be an issue. I wish your mother good luck on the appeal.

[SecretOC]

Hmmmmmm, those post-filing events shouldn`t be an issue. I wish your mother good luck on the appeal.

Thank you. Oh also i have been reading about receiving inheritances lately and it says that the time of death of that person is when you receive an inheritance. If the look back period is 180 days (http://www.bkforum.com/showthread.ph...ay-inheritance) then why would my mother be in deep crap for not reporting it? her attorney advised her to not report the inheritance because it occurred so long ago. Even if the other party is alleging fraud the look back period for fraud is 4 years. This inheritance still is nowhere near that scope of 4 years. On top of that she never received the money nor was entitled...

[LadyInTheRed]

Thank you. Oh also i have been reading about receiving inheritances lately and it says that the time of death of that person is when you receive an inheritance. If the look back period is 180 days (http://www.bkforum.com/showthread.ph...ay-inheritance) then why would my mother be in deep crap for not reporting it? her attorney advised her to not report the inheritance because it occurred so long ago. Even if the other party is alleging fraud the look back period for fraud is 4 years. This inheritance still is nowhere near that scope of 4 years. On top of that she never received the money nor was entitled...

If on the date of filing, your mother had a vested interest in an estate, regardless of when she is supposed to receive her interest, it must be disclosed on her petition. If she became entitled to an inheritance within 180 days after filing BK, then she would have to report it to the trustee If she had no interest in an estate/inheritance, then I don't know why it would be an issue in the estate. Somebody must think she has an interest in it.

[SecretOC]

If on the date of filing, your mother had a vested interest in an estate, regardless of when she is supposed to receive her interest, it must be disclosed on her petition. If she became entitled to an inheritance within 180 days after filing BK, then she would have to report it to the trustee If she had no interest in an estate/inheritance, then I don't know why it would be an issue in the estate. Somebody must think she has an interest in it.

Ok after searching some more i found this AVVO article. http://www.avvo.com/legal-guides/ugc...ur-inheritance which states "If the decedent died more than 180 days prior to the date of filing, the inheritance is yours." Whats your take on this article LadyInTheRed? Thank you so much for taking your time!

[justbroke]

Ok after searching some more i found this AVVO article. http://www.avvo.com/legal-guides/ugc...ur-inheritance which states "If the decedent died more than 180 days prior to the date of filing, the inheritance is yours." Whats your take on this article LadyInTheRed? Thank you so much for taking your time!

Huh? It's within 180 days of filing. It is always "yours". The only difference is whether it becomes property of the bankruptcy estate. If you inherited something before filing, it is certainly yours but still subject to liquidation (in a Chapter 7) if there are no exemptions. If it occurs within 180 days "after" filling, then it is still property of the bankruptcy estate, as if you gained ownership the day before filing. 11 USC 541(a)(5) talks about 180 days as relative to the "date" of filing the bankruptcy petition. Some people misread it to think that it's "within" 180 days of the filing date in either direction. That is not how it was meant to be read.

Anything you acquire or are entitled to acquire before filing is always property of the Estate (and may be exempted if there are exemptions available). Everything you acquire after filing, with some exceptions, is your property and NOT property of the Estate. The exceptions are that if you somehow are bequeathed or otherwise inherit property, or obtain property through a divorce proceeding, within that 180 days after filing, that also is property of the Estate as if you inherited or obtained the property the day before filing.

[SecretOC]

Huh? It's within 180 days of filing. It is always "yours". The only difference is whether it becomes property of the bankruptcy estate. If you inherited something before filing, it is certainly yours but still subject to liquidation (in a Chapter 7) if there are no exemptions. If it occurs within 180 days "after" filling, then it is still property of the bankruptcy estate, as if you gained ownership the day before filing. 11 USC 541(a)(5) talks about 180 days as relative to the "date" of filing the bankruptcy petition. Some people misread it to think that it's "within" 180 days of the filing date in either direction. That is not how it was meant to be read.

Anything you acquire or are entitled to acquire before filing is always property of the Estate (and may be exempted if there are exemptions available). Everything you acquire after filing, with some exceptions, is your property and NOT property of the Estate. The exceptions are that if you somehow are bequeathed or otherwise inherit property, or obtain property through a divorce proceeding, within that 180 days after filing, that also is property of the Estate as if you inherited or obtained the property the day before filing.

Ok so I read that code, But since the inheritance occured 35 years ago then why would it still be a problem? And since the date of receiving money from the inheritance does not matter then whats the problem?! It just keeps getting worse and worse

[justbroke]

Ok so I read that code, But since the inheritance occured 35 years ago then why would it still be a problem? And since the date of receiving money from the inheritance does not matter then whats the problem?! It just keeps getting worse and worse

I don't actually know what the specific problem, or the cause, that was listed by the creditor stated and proved. If it was material mis-statements in the bankruptcy filing, that would be cause. If she had an ownership interest in some property, even if it occurred 35 years ago but still had such interest in the property but failed to disclose that interest, that could be a problem.

[LadyInTheRed]

SecretOC, based on the details you have provided, we can only guess. But, let's say somebody died 35 years ago and left a trust. If your mother received assets from that trust and still has those assets, they are an asset of the bankruptcy estate. If the trust still exist and your mother receives income from that trust, then that should have been disclosed. If the trustee of the trust has discretion to distribute principal, then your mother has an interest in the trust that should have been disclosed. But, if the distributions are discretionary, then whether there is any value to the BK estate depends on the terms of the trust and state law. If your mother gets no current distributions from the trust and the trustee has no discretaion to distribute to her, but the trust is irrevocable and she will inherit after the death of a current beneficiary or somebody else, then she has a future interest in the trust that has some current value and is an asset of the BK estate. Or maybe your mother should have received assets from the trust, but the trustee has been holding onto them contrary to the terms of the trust in which case she has a claim against the trustee of the trust that should have been disclosed on the BK petition.

There are many ways in which your mother can have a current interest in an estate as a result of a death 35 years ago that should be disclosed in a BK. These are some examples.

[SecretOC]

I don't actually know what the specific problem, or the cause, that was listed by the creditor stated and proved. If it was material mis-statements in the bankruptcy filing, that would be cause. If she had an ownership interest in some property, even if it occurred 35 years ago but still had such interest in the property but failed to disclose that interest, that could be a problem.

Ah ok i see, well the creditor believe that the funds were transferred for hiding to a family member but what really happened was that the debtor's inheritance was taken by the brother for a loan that he gave that was not paid back. There was no will so would she still be entitled? This occurred 3 years prior to filing.

SecretOC, based on the details you have provided, we can only guess. But, let's say somebody died 35 years ago and left a trust. If your mother received assets from that trust and still has those assets, they are an asset of the bankruptcy estate. If the trust still exist and your mother receives income from that trust, then that should have been disclosed. If the trustee of the trust has discretion to distribute principal, then your mother has an interest in the trust that should have been disclosed. But, if the distributions are discretionary, then whether there is any value to the BK estate depends on the terms of the trust and state law. If your mother gets no current distributions from the trust and the trustee has no discretaion to distribute to her, but the trust is irrevocable and she will inherit after the death of a current beneficiary or somebody else, then she has a future interest in the trust that has some current value and is an asset of the BK estate. Or maybe your mother should have received assets from the trust, but the trustee has been holding onto them contrary to the terms of the trust in which case she has a claim against the trustee of the trust that should have been disclosed on the BK petition.

There are many ways in which your mother can have a current interest in an estate as a result of a death 35 years ago that should be disclosed in a BK. These are some examples.

Thank you, as i mentioned above though, there was no trust or will. Just based on the deceased widow's wrod on distribution which she knew about the loan. I know it is complicated but would she still be entitled after that?

[LadyInTheRed]

If there was no will or trust, then entitlement to the estate depends on laws of intestate succession in the state where the decedent resided. What was your mother's relationship to the decedent? If your mother was entitled to a portion of the estate and somebody else took it, then your mother had a claim against the person who took what she was entitled to. That claim would be an asset of the BK estate. It sounds like the widow claims that your mother consented to the transfer of her share of the estate to somebody else and that the judge was convinced that was the case and that she did it to avoid creditors. Since a summary judgement was granted, it sounds like your mother did not present any evidence to contradict the creditor's complaint, the evidence she presented was insufficient, or the judgement was not a good one which is why her attorney wants to file an appeal.