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Ask Terry L. Your Own Question

Terry L.
Terry L., Attorney
Category: Bankruptcy Law
Satisfied Customers: 2517
Experience:  Better Business Bur 15yrs bankruptcy experience. Chicago Bar
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Hi, I am a creditor in a bankruptcy filing, the trustee asked

Customer Question

Hi, I am a creditor in a bankruptcy filing, the trustee asked for and received an extension of 60 days in this case. My feeling is that the trustee will be persuing fraud charges. Part of their on the record testomony was that they had 4 properties that were not rented, overgrown by vegitation etc. for the past four years. I went to the properties and spoke with two tenants who both stated that they were paying between 6-8 hundred dollars a month cash for the past three years to the petitionor.
I believe that this is their 3rd round with bankruptcy filings since the early 90's. They both know how to work the system.

What would be our best options before the 60 days are up? What will our rights be at the 60 day point?

By filing for relief from the stay before the 60 days is up would we be able to get this case back in civil trial court? We attended mandatory mediation prior to trial and the mediator indicated to the defendants attorney that they had no case/defense for not paying. I guess our ultimate goal is to get the money or at least a judgement.

We are trying to do this part without an attorney but if need be we will hire one. The defendant owes us about $75,000 from my selling him a pest control company in 2005.

He paid $355,000 for the business, he told the trustee that he sold the business and four properties just prior to filing bankruptcy for $34,000. He has no written contract fo the sale, all on a handshake.

Right now I'm in a hospital so if you need to speak with me my cell # XXXXX XXXXX

Any advise you could give would be deeply appreciated.

Thank you, XXXXX
Submitted: 2 years ago.
Category: Bankruptcy Law
Expert:  Terry L. replied 2 years ago.

Terry L. :

Hi, thanks for your question. You should hire a lawyer for specific legal advice. No attorney client relationship is created here.

Terry L. :

First off, while on the same side, you and the trustee can both take actions in this case to protect your interests.

Terry L. :

The trustee seeks to recoup assets for the estate to be liquidated for creditors, including you.

Terry L. :

You can also file an adversary to object to the discharge

Terry L. :

This will protect your rights to collect on the debt, if the court rules that your debt is not discharged in the case.

Terry L. :

The trustee may not get all funds necessary to pay you off.

Terry L. :

You can work with the trustee to provide information regarding the fraud/false information given though.

Terry L. :

Modifying the stay will only allow you to proceed with a suit to collect property - like repossess a car if you have a lien, foreclose if you have a mortgage lien etc.
you would not be able to collect on the debt from the debtors, unless the court enters a judgment on an adversary case that you would need to bring

Terry L. :

The trustee can go after preferences and recent sales, and information you provide can be useful.

Customer :

Hi Terry, I'm typing from a hospital be and my doctor just came in, can I call you in a little while or continue this until a little later, I don't want to you lose you online. My tel. # is XXX-XXX-XXXX, Thanks Bob Cianci

Terry L. :

You can respond here. THanks

Customer :

ok thanks

Terry L. :

Use my name in the title, and I'll anser

Customer :

Hi Terry I'm back. A little more backround information. We had a civil trial date set for a Monday in October, the previous Friday is when he filed. As stated before he had no defense at this trial and in all probability whould have been ordered to pay. Thats when he started to get rid of his assetts.

Customer :

You mention the word adversary, is this a form we get from the court and can file ourselves.

Customer :

Would the trustee be able to file it, on her behalf or our behalf. If we have to hire an attorney for this what would be a fair price to pay for this service? Would this adversary form allow us to continue with the civil trial. How difficult is it for a lay person to file this form? Thanks

Customer :

I fear

Customer :

I'm af

Customer :

I'm afraid we will get disconnected, my number is seven two seven, four, two, three, seven, one, nine, one.

Customer :

HELLOOOOOOOOOOO, ANYONE THERE???

Terry L. :

Sorry, This was not a live chat

Terry L. :

So, once the debtor files, all action must stop due to the automatic stay protection the debtor gets when they file.

Terry L. :

An adversary is a trial within the bankruptcy case, whereby a creditor seeks to get a court order denying discharge for their debt. Usually, these fall under 11 USC 523 of the bankruptcy code.

Terry L. :

You should seek out a local bankruptcy attorney to assist you, as they are not easy.

Terry L. :

It's a whole trial, but starts with an adversary being filed with the court. There is no set form to use at the court, save for some general documents that need to be filed. Each case is totally different, so a blank form wouldn't be useful here.

Terry L. :

The trustee goes after assets, so they don't file for one creditor alone.

Terry L. :

The US trustee makes sure that the debtor is being truthful, providing all required documents etc, and can bring a motion to dismiss a case for whichever reason.

Terry L. :

So, my suggestion is to meet with an attorney to discuss if an adversary would be proper in your situation.

Terry L. :

Also, contact the trustee regarding the information you are concerned with, and facts that you may be aware of. This can help the trustee get to the assets of the bankruptcy estate.

Terry L. :

Creditors can go to the 341 meeting as well to ask the debtor questions about the situation too.

Terry L. :

Adversaries can be done pro-se (without a lawyer) but it is highly recommended to use an attorney.

Terry L. :

Be cautious of your deadlines to file these objections, they are set out in the 341 notice.

Terry L. :

Thanks for your question, good luck. let me know if you have any others.

Customer :

Thanks for your reply, do you know an approximate amount for an attorney to file an adversary. Let's say a local atty. makes $300 per hour, what would this type hearing cost? What will happen if the trustee decides to file fraud charges, will that stop the bankruptcy? If it does stop it will I be able to continue the civil lawsuit?

Customer :

I'm not sure if I mentioned it but we did have a civil trial date set for a Monday in October and the Friday before is when he filed his bankruptcy.

Terry L. :

I only defend them as a debtors' attorney. They would either charge an hourly rate or a contingency fee based on the recovery.

Terry L. :

Yes, if the trustee brings a motion to deny discharge, then yes, creditors can then re-collect on the debt. however, if the trustee just goes after assets, that's all that happens, the debts are discharged, and they share in the dividend from liqudiated assets

Terry L. :

civil trial needs to be dismissed because of the bankruptcy, period.

Terry L. :

automatic stay protection mandates it.

Terry L. :

any other questions?

Terry L. :

if you do, let me know and i'll respond

Terry L. :

Please click accept so that I may get credit here for answering.

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