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Chapter 7 Report Of No Distribution

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ForwardLooking
Regular Contributor

Re: Chapter 7 Report Of No Distribution


@BEN52 wrote:

Well the worst has happened. The UST got involved and long story short, much of what my lawyer told me was ok was not. My chapter 7 was dismissed for "totality of circumstances".

 

So my question is "now what"? Will the accounts that creditors previously closed be reopened? Will the debt just be sold to a collector? Just trying to pick up the pieces here. 


I had a lawyer that filed a Chapter 13 BK for me (20 years ago) use some shady math and could not get aligned with the Trustee.  The judge dismissed the case without prejudice and made the lawyer refund the money I had paid him for legal fees.  The Trustee had not paid anything to creditors yet because the plan was not approved, so that was refunded to me as well.  I had a waiting period of about 180 days before I could re-file.  I turned my focus to the basics of food, clothing, and shelter and used the money refunded from the trustee to apply towards my mortagage deliquencies.  At 180 days I had a new lawyer and refiled -- process went much smother and I was able to get back on track.

 

I know your case is slightly different with a Chapter 7 filing, but I would definatly see if you have a chance of getting anything you may have paid your lawyer refunded to you and find a new lawyer.  If you are above the means test, then consider a Chapter 13 or re-evalute your financial position and decide if you can do it on your own.  If creditors begin calling again because the stay is lifted, just tell them you are working with a lawyer to move to refile and bankruptcy is still on the table (Just don't tell them you are going to refile as a Chapter 13).

Message 11 of 21
FireMedic1
Community Leader
Mega Contributor

Re: Chapter 7 Report Of No Distribution

Ut oh. You did say you were over the means test. Dont know why the lawyer followed thru knowing this with a 7. The totality of circumstances test is used by a bankruptcy court to determine if a debtor has engaged in substantial abuse of the bankruptcy process by filing for Chapter 7 bankruptcy when he or she actually has sufficient income to repay debts under a Chapter 13 payment schedule. I'll ping my pal @despritfreya for insight on this mess. Sorry for the foul up.


Message 12 of 21
despritfreya
Frequent Contributor

Re: Chapter 7 Report Of No Distribution


@BEN52 wrote: . . . The UST got involved. . .  My chapter 7 was dismissed for "totality of circumstances". So my question is "now what"? Will the accounts that creditors previously closed be reopened? Will the debt just be sold to a collector? Just trying to pick up the pieces here. 

Just confirming.  Between mid to late April, the UST filed a Motion to Dismiss, your attorney filed a Response, a Hearing was held and the Judge determined that the case should be dismissed (or converted if you agree to a conversion).  That seems like a lot to happen in just over 2 months. 

 

Or. . .  after looking at the issue, did you decided to stipulate to a Dismissal of the case instead of fighting it?

 

Regardless, the dismissal puts you back to where you were before you filed.  Creditors are free to collect however state law allows.  This includes direct collection, collection attempts by a collection agency, filing a lawsuit, etc.  If and when a creditor contacts you, you could try to settle if you are not inclined to try bk again (most likely a Chapter 13).

 

Sorry this happened to you.

 

Des.

Message 13 of 21
FireMedic1
Community Leader
Mega Contributor

Re: Chapter 7 Report Of No Distribution


@despritfreya wrote:

@BEN52 wrote: . . . The UST got involved. . .  My chapter 7 was dismissed for "totality of circumstances". So my question is "now what"? Will the accounts that creditors previously closed be reopened? Will the debt just be sold to a collector? Just trying to pick up the pieces here. 

Just confirming.  Between mid to late April, the UST filed a Motion to Dismiss, your attorney filed a Response, a Hearing was held and the Judge determined that the case should be dismissed (or converted if you agree to a conversion).  That seems like a lot to happen in just over 2 months. 

 

Or. . .  after looking at the issue, did you decided to stipulate to a Dismissal of the case instead of fighting it?

 

Regardless, the dismissal puts you back to where you were before you filed.  Creditors are free to collect however state law allows.  This includes direct collection, collection attempts by a collection agency, filing a lawsuit, etc.  If and when a creditor contacts you, you could try to settle if you are not inclined to try bk again (most likely a Chapter 13).

 

Sorry this happened to you.

 

Des.


Thanks again @despritfreya for taking the time for responding. 👍


Message 14 of 21
BEN52
Established Member

Re: Chapter 7 Report Of No Distribution


@despritfreya wrote:

@BEN52 wrote: . . . The UST got involved. . .  My chapter 7 was dismissed for "totality of circumstances". So my question is "now what"? Will the accounts that creditors previously closed be reopened? Will the debt just be sold to a collector? Just trying to pick up the pieces here. 

Just confirming.  Between mid to late April, the UST filed a Motion to Dismiss, your attorney filed a Response, a Hearing was held and the Judge determined that the case should be dismissed (or converted if you agree to a conversion).  That seems like a lot to happen in just over 2 months. 

 

Or. . .  after looking at the issue, did you decided to stipulate to a Dismissal of the case instead of fighting it?

 

Regardless, the dismissal puts you back to where you were before you filed.  Creditors are free to collect however state law allows.  This includes direct collection, collection attempts by a collection agency, filing a lawsuit, etc.  If and when a creditor contacts you, you could try to settle if you are not inclined to try bk again (most likely a Chapter 13).

 

Sorry this happened to you.

 

Des.

 

I enfed up stipulating to a dismissal for two reasons. The first is that the reasons for the dismissal were largely true but were things that my lawyer told me weren't issues on the front end. Once called by the trustee I was told by my lawyer I was told I had no real defense. Second was I didn't really have the money. 


 

Message 15 of 21
BEN52
Established Member

Failed Ch 7

Hello,

So backstory, 37 year old married with 3 kids. Sitting on roughly 55k in unsecured debts. Combination of credit cards and consolidation loans. Never a situation I ever envisioned being in. Accumulated debt through poor financial choices, living beyond means, and a divorce. After spinning my wheels making the minimums and making zero progress and being buried by this debt I explored bankruptcy. Being over median I figured Chapter 13. I contacted a lawyer who convinced me that based based upon my expenses and family size I was a “slam dunk” chapter 7 case despite being over median. During the process if completing the bankruptcy petition I provided a years worth of paystubs for my wife and I, 90 days of bank statements for my wife and I, 3 years of tax records, and debt information and detailed monthly expense information. The petition was completed by my lawyer and I was was ensured that all was well, “in the event the UST raises any questions we have an excellent narrative and solid grounds to meet any objections”. I paid my attorney $4,500 for this work.

We filed in March. I had my 341 hearing without incident and received a report of no distribution quickly. I was feeling positive. A few weeks later however the UST filed a motion for possible abuse. The UST raised several objections relating to my income, my taxes being deducted on my monthly income but getting a refund, disputing my monthly expenses, and disputing my retirement contribution. My attorney was suddenly less confident, started dragging his feet, and for the first time mentioned ch 13. While we prepared responses to the UST’s questions, the UST filed a motion for dismissal under a presumption of abuse under a totality of circumstances. At this point my lawyer stated my odds of beating this were very very low and I was facing a lengthy and expensive legal battle. For that reason I chose not to fight the dismissal. I was presented with the option of converting to a ch 13 but per my lawyer I was looking at
100% case which I saw no advantage in. The case was dismissed last week.

So now I ask where does this leave me? I owe the following:

SoFi personal loan: $28,959
SoFi personal loan: $11,348
Chase CC: $623
Chase CC: $5,383
Chase CC: $2,633
Barclays CC: $1903
Citi CC: $1,726

I also have 13k in student loans. Fortunately I am 4-6 payments away from qualifying for public service loan forgiveness.

What suggestions would you have on how to proceed? Attempt to settle and pay on my own? Seek counsel to help settle? Look further into a 13? I have about $2,000 in saved funds now and can afford $800 or so a month in payments, maybe $1,000. Open to any thoughts, comments, or suggestions.

Sorry for the lengthy post, thank you.

Message 16 of 21
FireMedic1
Community Leader
Mega Contributor

Re: Failed Ch 7

@BEN52Your thread in Rebuild was merged with this original thread. Please refrain from cross posting. Its confusing to members. Caught me off guard and thought the same thing happened to another poster. I answered your above post up thread along with the BK Lawyers advice. Thanks.


Message 17 of 21
BEN52
Established Member

Re: Failed Ch 7


@FireMedic1 wrote:

@BEN52Your thread in Rebuild was merged with this original thread. Please refrain from cross posting. Its confusing to members. Caught me off guard and thought the same thing happened to another poster. I answered your above post up thread along with the BK Lawyers advice. Thanks.


I posted it there because this isn't necessarily a bankruptcy issue anymore per se. I attempted bankruptcy and it failed. I am once again back to trying to figure out how to manage 50k in debt hence I posted in a "rebuild" forum soliciting input from people who have rebuilt. That was the reason for the new post. The post included the failed bankruptcy attempt to be through but no more than that.

Message 18 of 21
FireMedic1
Community Leader
Mega Contributor

Re: Failed Ch 7

We can help in here. Its a continuation from begining to getting what you need. As posted. Your back to square one. Put all you can towards the debts. I'd even look into your states bar and file a complaint you were mislead that the lawyer kinda knew you were over the limit and still went ahead with the 7. many post getting their DC papers in here and the rebuild begins.


Message 19 of 21
BEN52
Established Member

Re: Failed Ch 7


@FireMedic1 wrote:

We can help in here. Its a continuation from begining to getting what you need. As posted. Your back to square one. Put all you can towards the debts. I'd even look into your states bar and file a complaint you were mislead that the lawyer kinda knew you were over the limit and still went ahead with the 7. many post getting their DC papers in here and the rebuild begins.


That's the plan. I am contacting creditors attempting to work out payment arrangements and potentially some settlements. Strangely they don't necessarily want to talk to me or take my money at this point. Not all of the creditors have updated and as the still show in bankruptcy I know they won't talk to me but I am trying to get out ahead it it.

 

As far as my lawyer goes I haven't decided if I am going to do anything about him or not. I only have so much time and energy ya know. 

Message 20 of 21
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