How JustAnswer Works:

  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.

Ask socrateaser Your Own Question

socrateaser
socrateaser, Attorney
Category: Bankruptcy Law
Satisfied Customers: 32910
Experience:  Attorney and Real Estate Broker -- Retired (mostly)
Type Your Bankruptcy Law Question Here...
socrateaser is online now
A new question is answered every 9 seconds

I have a friend who was divorced a few years ago (in Michigan).

Resolved Question:

I have a friend who was divorced a few years ago (in Michigan). The judgment awarded him the primary residence and his ex-wife a $50,000 lien. The wording is as follows: Defendant shall be awarded the 14 acres located on XXXX Rd, Michigan, Lapeer County and described below, free and clear of any claims of Plaintiff (wife), upon payment of $50,000.00 to Plaintiff. The husband was required to move to Texas due to work and could not maintain the property. It went into foreclosure. The wife since remarried, moved to Tennessee and filed bankruptcy Chapter 7 with no assets. She is now petitioning the courts in Michigan to force the $50,000 lien to be paid within 10 years. I was under the impression that if bankruptcy was filed with no assets that any action to acquire the funds from a lien like that would have to go to pay debtors otherwise would be considered federal fraud. Is this true? Can you provide the statutes or laws pertaining to this? My friend cannot afford legal assistance and because he lives in one state with the property and judgements filed in another, he cannot obtain any of the free services normally available.
Submitted: 1 year ago.
Category: Bankruptcy Law
Expert:  socrateaser replied 1 year ago.
Hello,

There are two possibilities here. If the debtor did not schedule the $50,000 as an asset in the bankruptcy, then the failure to schedule the asset may be bankruptcy fraud, regardless of anything else. Were that true, and the trustee discovers the error, then the trustee could ask the court to reopen the case, and the court would likely to do so, so that the asset could be recovered. This assumes, however, that the debt is worth recovering. The trustee has the authority to decide not to try to recover the value of the asset, if he/she believes it will not be worth the effort.

The statutory authority to reopen the case is found in Bankr. Code 350(b).

Even if the trustee were to decide to request that the case be reopened, a bankruptcy court may decline to reopen a case to recover an asset that the trustee made a deliberate informed decision not to administer. In re Adair (9th Cir. BAP 2000) 253 BR 85, 91 (court refused to reopen Chapter 7 case in order to revoke trustee's technical abandonment of lawsuit that debtors had properly scheduled as having value in “unknown amount” (although case ultimately settled for about $430,000)).

The botXXXXX XXXXXne is that if the debtor didn't report the asset, then the trustee will try to determine if it's worth the money to go after the third-party debtor (ex-spouse) to recover the debt.

The last thing that would be considered would be a bankruptcy fraud investigation, because that doesn't make the trustee or the unsecured creditors of the bankruptcy debtor any money -- and it costs the federal government money to investigate and prosecute. Only if there were some sort of conspiracy to hide the asset, between the two ex-spouses, is it likely that a criminal investigation would occur.

Hope this helps and happy new year.
Customer: replied 1 year ago.
My friend's ex-wife has been notorious for lying to the courts to gain as much money as she can. Her bankruptcy was just filed and has not yet been discharged. It is more likely that she is asking the Michigan courts to re-open and reaffirm the divorce lien with a specific time frame to secure money for herself, rather than her attorney asking for it to be addressed as part of the assets. The Michigan hearing is scheduled for Jan 28 while the Bankruptcy Tennessee hearing is scheduled for Jan 8. The ex-wife had done things which caused the home to go into foreclosure to begin with. She has also "kidnapped" the children and removed them from the Michigan to Tennessee without court notice to my friend prior to the move. All that aside, if the bankruptcy hearing is held without the $50,000 lien disclosed to the trustee, would my friend be wise to bring it information to the courts in Michigan in order to alleviate the lien from his responsibility?
Expert:  socrateaser replied 1 year ago.
You can contact the bankruptcy court and get a copy of the bankruptcy petition. Then you will know for certain whether or not the $50,000 asset is listed on the schedules.

As for whether it's a good idea to bring up the issue -- if you want to play hardball, then once you know that the asset is not listed, then you could say nothing to the bankruptcy court, and then when it comes time for this debt to be litigated in state court, your friend could negotiate on the basis of something like, "If you don't drop this entire thing, then I'll report it to the bankruptcy trustee, and the trustee will end up with all of the money -- not you."

Ordinarily, that sort of negotiation could be considered criminal extortion -- but, as part of a litigation settlement, things are usually a little more gray. I wouldn't do any of this without hiring a lawyer to negotiate -- but, the botXXXXX XXXXXne is that I don't see any point in notifying the bankruptcy trustee now -- and until you know that the asset isn't scheduled in the bankruptcy filing, you can't actually make any decision about how to proceed.

Hope this helps. .
socrateaser, Attorney
Category: Bankruptcy Law
Satisfied Customers: 32910
Experience: Attorney and Real Estate Broker -- Retired (mostly)
socrateaser and other Bankruptcy Law Specialists are ready to help you

JustAnswer in the News:

 
 
 
Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... Justanswer.com.
JustAnswer.com...has seen a spike since October in legal questions from readers about layoffs, unemployment and severance.
Web sites like justanswer.com/legal
...leave nothing to chance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.
 
 
 

What Customers are Saying:

 
 
 
  • Mr. Kaplun clearly had an exceptional understanding of the issue and was able to explain it concisely. I would recommend JustAnswer to anyone. Great service that lives up to its promises! Gary B. Edmond, OK
< Last | Next >
  • Mr. Kaplun clearly had an exceptional understanding of the issue and was able to explain it concisely. I would recommend JustAnswer to anyone. Great service that lives up to its promises! Gary B. Edmond, OK
  • My Expert was fast and seemed to have the answer to my taser question at the tips of her fingers. Communication was excellent. I left feeling confident in her answer. Eric Redwood City, CA
  • I am very pleased with JustAnswer as a place to go for divorce or criminal law knowledge and insight. Michael Wichita, KS
  • PaulMJD helped me with questions I had regarding an urgent legal matter. His answers were excellent. Three H. Houston, TX
  • Anne was extremely helpful. Her information put me in the right direction for action that kept me legal, possible saving me a ton of money in the future. Thank you again, Anne!! Elaine Atlanta, GA
  • It worked great. I had the facts and I presented them to my ex-landlord and she folded and returned my deposit. The 50 bucks I spent with you solved my problem. Tony Apopka, FL
  • Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C. Freshfield, Liverpool, UK
 
 
 

Meet The Experts:

 
 
 
  • FiveStarLaw's Avatar

    FiveStarLaw

    Attorney

    Satisfied Customers:

    3203
    Bankruptcy Lawyer. Experienced.
< Last | Next >
  • http://ww2.justanswer.com/uploads/FL/FLAandNYLawyer/2012-1-27_14349_3Fotolia25855429M.64x64.jpg FiveStarLaw's Avatar

    FiveStarLaw

    Attorney

    Satisfied Customers:

    3203
    Bankruptcy Lawyer. Experienced.
  • http://ww2.justanswer.com/uploads/TL/tleeders/2012-6-13_204815_TSL1.64x64.jpg Terry L.'s Avatar

    Terry L.

    Attorney

    Satisfied Customers:

    2204
    Better Business Bur 15yrs bankruptcy experience. Chicago Bar
  • http://ww2.justanswer.com/uploads/mnphillips2/2009-03-13_203105_10984459-249293407.jpeg Phillips Esq.'s Avatar

    Phillips Esq.

    Attorney-at-Law

    Satisfied Customers:

    950
    B.A.; M.B.A.; J.D.
  • http://ww2.justanswer.com/uploads/CO/cortrightlaw/2011-12-5_4117_Kevin.64x64.JPG cortrightlaw's Avatar

    cortrightlaw

    Attorney

    Satisfied Customers:

    490
    Attorney practicing Bankruptcy Law including Chapter 7, Chapter 11, Chapter 12, and Chapter 13.
  • http://ww2.justanswer.com/uploads/Jay1968/2006-12-03_004423_JoeRossPhoto.jpg JoeLawyer's Avatar

    JoeLawyer

    Attorney

    Satisfied Customers:

    376
    Attorney in the practice of Bankruptcy Law since 1996
  • http://ww2.justanswer.com/uploads/DY/Dylatess/2012-9-11_1968_BHBTemplePhoto.64x64.jpg dylatess's Avatar

    dylatess

    Attorney

    Satisfied Customers:

    370
    35 plus years of experience specializing in bankruptcy law
  • http://ww2.justanswer.com/uploads/US/USLawAnswers/2012-9-20_23143_20090105211638Headshot3b.64x64.jpg Brent Blanchard's Avatar

    Brent Blanchard

    Bankruptcy Attorney

    Satisfied Customers:

    315
    Twelve years experience in all aspects of debtor & creditor BK.