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JoeLawyer
JoeLawyer, Attorney
Category: Bankruptcy Law
Satisfied Customers: 767
Experience:  Attorney in the practice of Bankruptcy Law since 1996
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- My wife and I reside in California. - My wife and I separated

Customer Question

- My wife and I reside in California.
- My wife and I separated in June of 2011.
- Our divorce is pending.
- During our marriage we borrowed money from my mom (a contract was drafted and signed)
- After we separated my mom filed a suit for breach of contract for the loan
- A lis pendens was recorded against our property in December 2011 because some of the money was used to upgrade our home
- My wife filed for chapter 7 bankruptcy in May, 2012.
- Our home was abandoned by the bankruptcy trustee.
- We put our house up for sale in October, 2012
- The lis pendens was still active
- We received a full price offer but the sale was held up by the lis pendens
- In a last minute deal, a stipulation was drafted by my wife's attorney stipulating that the lis pendens would be dropped but the proceeds would remain in trust until a property settlement was reached in the family court. It was also stipulated that any distribution of the proceeds in trust had to be agreed upon by me, my wife, and my mom.
- We subsequently sold our house in Nov, 2012.
- My wife has now REOPENED her bankruptcy case to have the "lien" on the property sale proceeds removed.
- The bankruptcy judge said it was an interesting case because technically there is no "lien" but instead a stipulation entered by all parties after my wife's discharge.
- My wife's bankruptcy attorney is saying her discharge was a "community discharge"
and I shouldn't be allowed to pay off the community debts with the proceeds from the house sale.
- I want to pay back my mom from the proceeds of our house sale.
- I have evidence my wife did not disclose all her monthly income. She hid $2000/month from the trustee.
- I want to have my wife's discharge revoked.
- The judge told me I needed to file a motion to have her discharge revoked.
- The judge said something about a companion motion.
- I have online access to the following forms:
Complaint Objecting to Discharge of Debtor in Bankruptcy Due to False Oath or Account of Debtor
Notice of Motion

I have three questions and one request.

1. Now that my wife's bankruptcy is reopened, can I file a complaint to revoke discharge or is that only available to the trustee?

2. What forms do I need to file to get the court to consider revoking my wife's discharge?

3. One of the discrepencies involves how much money she borrowed from her father to pay her family law attorney (she discharged this debt). Can I demand that she produce her invoices from her family law attorney, if so how? This matters because now my wife is trying to fudge all her numbers to show she included the $2000/month income but lumped it into a loan from her father.

My request: I will need some assistance filling out the necessary forms.

To sum up my request, I need some help filling out necessary forms. Please let me know what you would charge to answer my 3 questions and help me fill out the forms. I expect it would take no more than 10 minutes per form of back and forth messaging. I'd love to retain an attorney to do all this for me, but I simply don't have the funds, so I need to do this on my own.

thanks in advance.
Submitted: 1 year ago.
Category: Bankruptcy Law
Expert:  JoeLawyer replied 1 year ago.
Hello Hormel.

I'll be happy to assist you to the extent I can, which may not be to the extent you want, but I'll get to that. First things first...

Regarding question (1) "Now that my wife's bankruptcy is reopened, can I file a complaint to revoke discharge or is that only available to the trustee?"

SHORT ANSWER: The trustee, U.S. Trustee, or a creditor all may attempt to revoke a discharge

LONG ANSWER: 11 U.S.C. 727(d) (HERE) states that:

"(d) On request of the trustee, a creditor, or the United States trustee, and after notice and a hearing, the court shall revoke a discharge granted under subsection (a) of this section if—
(1) such discharge was obtained through the fraud of the debtor, and the requesting party did not know of such fraud until after the granting of such discharge;
(2) the debtor acquired property that is property of the estate, or became entitled to acquire property that would be property of the estate, and knowingly and fraudulently failed to report the acquisition of or entitlement to such property, or to deliver or surrender such property to the trustee;
(3) the debtor committed an act specified in subsection (a)(6) of this section [i.e. the debtor refused to obey an order or testify when appropriate]; or
(4) the debtor has failed to explain satisfactorily—
(A) a material misstatement in an audit referred to in section 586 (f) of title 28; or
(B) a failure to make available for inspection all necessary accounts, papers, documents, financial records, files, and all other papers, things, or property belonging to the debtor that are requested for an audit referred to in section 586 (f) of title 28."

11 U.S.C. 727(e) goes on to qualify WHEN you can attempt to revoke a discharge, indicating that the person seeking to revoke discharge may do so under subsection (d)(1) within one year after the discharge was granted; or under subsection (d)(2) or (d)(3) before the later of (A) one year after the granting of such discharge; and
(B) the date the case is closed.

So, hurdle number one to attempt to get a discharge revoked is showing that the attempt to revoke discharge is timely (to satisfy 11 U.S.C. 727(e)).

If your wife originally filed her case in May 2012 (9 months ago), then certainly one year has not elapsed since her discharge, so section (e) should not stop a challenge to her discharge if that challenge is made soon.

When seeking to revoke discharge, hurdle number two is that the person challenging the discharge must first establish standing, which means show that the person is either the trustee, U.S. Trustee, or a creditor, to satisfy 11 U.S.C. 727(d). Since obviously you are not the first two, you would have to show you were a creditor of your wife's. If she listed you in Schedule D, E or F of her bankruptcy petition, that would be helpful since by doing so she at least indicated prima facie that you are a creditor, since those are the creditor schedules. But, if she did not list you in D, E or F of her petition, then you will have to convince a court that you are a creditor. Or, it might be easier for your mother to make this showing, but I can't advise you on whether you are or are not a creditor since we can only give information on here, not advice (and you can find a better explanation of why I can't give advice HERE).

Assuming you can show you are a creditor, or if you can't, assuming your mother is willing to pursue the revocation and she can show she is a creditor, then hurdle number three is satisfying one of the criteria in 11 U.S.C. 727(d)(1), (2), (3), or (4).

I can't advise you which section fits your situation since that might constitute "giving advice," and even if I could give advice, I wouldn't be able to anyway since I haven't had the opportunity to review paystubs, review the petition, listen to her recorded testimony at the 341, etc. But, I will say that frequently creditors who attempt to get a discharge revoked by alleging that income was not reported by the debtor pursue (d)(1), indicating that the failure to list the income was fraudulent. This is because (d)(2), (d)(3) and (d)(4) are pretty specific, and probably don't cover failing to report income, but who knows - a more brilliant legal mind than mine might be able to cobble an argument together from those sections also. I will leave that to you since, again, I can't give advice, only information.

Regarding question (2) "What forms do I need to file to get the court to consider revoking my wife's discharge?"

SHORT ANSWER: Motion to Reopen Bankruptcy Case (court fee $260), Adversary Proceeding Cover Sheet, Complaint to Revoke Discharge (court fee $293), and Notice of Motion.

LONG ANSWER: To attempt to revoke a discharge, the case must first be "reopened" before the Bankruptcy Court will accept any filings.

To reopen a case, one must file a Motion to Reopen Bankruptcy Case with the Bankruptcy Clerk in the district and division in which the Bankruptcy Case pended. This normally requires the person to pay the Reopen Fee charged by the Bankruptcy Court ($260, see fee schedule HERE) and file a Motion to Reopen, stating therein the reasons the case should be reopened (such as to file a Complaint to Revoke Discharge).

If the Bankruptcy Court grants the Motion to Reopen, then the person seeking to revoke discharge normally has to file an Adversary Proceeding called a Complaint to Revoke Discharge, indicating therein all of the reasons why the person thinks discharge should be revoked.

Let me stop here and clarify something: There are generally two ways to ask for something in Bankruptcy Court: by Motion, and by Adversary Proceeding. When you file a Motion and ask the court to do something (such as revoke a discharge), then this requires a written, signed Motion to be filed with the Bankruptcy Clerk and mailed to the other parties. Then, the Debtor may or may not object, and the Court normally sets a hearing (and definitely would if the motion were to revoke a Discharge since 11 U.S.C. 727(d) requires a hearing), then everyone would show up and make their cases to the judge, and the judge would issue a ruling (maybe from the bench, or maybe after taking a number of days to consider). However, an Adversary Proceeding is much more involved. An Adversary Proceeding is a formal process which follows the Bankruptcy Rules (HERE, in particular Rules 7001 through 7087) which essentially track the Federal Rules of Civil Procedure; it is basically a full-blown lawsuit in the Bankruptcy Court, complete with a discovery period, pre-trial conferences, exhibit lists, witness lists, and if not settled, a trial.

Now, technically, 11 U.S.C. 727(d) just says "On request of the trustee, a creditor, or the United States trustee," and does not specifically require an Adversary Proceeding. "Request" sounds like you could do this with a simple Motion. However, in many jurisdictions (and maybe all jurisdictions), courts have required that such a serious request be made through the more formal Adversary Proceeding process, particularly due to Bankruptcy Rule 7001(4) (HERE).

So, to file an Adversary Proceeding to revoke discharge, one has to file an Adversary Proceeding Cover Sheet, a Complaint to Revoke Discharge (which may also be called a "Complaint Objecting to Discharge of Debtor in Bankruptcy Due to False Oath or Account of Debtor," the name isn't so important), and a Notice of Motion. The Adversary Proceeding filing fee also has to be paid, which is $293. I'm not sure if the Notice of Motion is strictly required since that is normally what you file to indicate that you served a motion on the debtor and told the debtor they had X number of days to respond, but Adversary Proceedings actually go through the more formal Summons process to notify the debtor of its pendency. But, I always file a Notice of Motion to prove the Adversary Proceeding Cover Sheet and Complaint to Revoke Discharge were served on the debtor, just to be safe.

Once these documents are filed, the Bankruptcy Court will normally issue a Summons to the debtor, giving the debtor X number of days to respond. Sometimes the Court will make the plaintiff serve the Summons. In any case, once the Summons and Complaint are served on the debtor, then the plaintiff waits. If the debtor does not respond in a timely fashion, the plaintiff may file for default judgment, and if the debtor does respond timely, then the lawsuit will track along with the Federal Rules of Civil Procedure (see Bankruptcy Rules 7001-7087, link above).

Regarding question (3) "One of the discrepancies involves how much money she borrowed from her father to pay her family law attorney (she discharged this debt). Can I demand that she produce her invoices from her family law attorney, if so how?"

SHORT ANSWER: Yes

LONG ANSWER: Part of the Adversary Proceeding process is the discovery process, in which each party may demand documents and information from the other party.

There are several forms of discovery; a party may require the other party to answer questions under oath in a deposition, or may serve a request for production of documents on the other party, or may compel other sorts of discovery. If a party fails to comply with a discovery request, that party can be sanctioned under Bankruptcy Rule 7037.

As I eluded to at the beginning on my response, I may not be able to help you to the extent you asked since I cannot help you fill out forms. Filling out legal forms has been specifically determined to constitute the practice of law in many instances, so helping you in that capacity would be a violation. You will have to find an attorney licensed in your area who can meet with you to help you with the forms; no one on this site can do that without running afoul of the unauthorized practice of law rules. This prohibition is not a website rule, it is based on State law, so we just can't do it. I am very sorry.

I hope the information I have given you is helpful, even if it is not exactly what you asked for in terms of helping you with the forms. But, what I have learned over the years is that Bankruptcy Courts don't usually get hung up too much on whether forms are perfect so much as they are interested in the real facts and circumstances. Most of the time, if forms get their point across to the judge, it is not a fatal flaw if some wording isn't perfect. But, that being said, Adversary Proceedings are not simple, so doing one yourself could be tricky, and a mistake could be unfixable once it is made. So, I strongly recommend you at least meet with Legal Aid or some low-cost or free legal provider in your area for assistance if you have any doubts.

If there is anything else I can help you with, please let me know and I will be happy to help as much as I can!

Good luck and thanks for using JustAnswer.com,
Joe

LEGAL NOTICE: I am only licensed to practice law in certain state(s) and I cannot give legal advice to someone who does not reside in a state in which I am licensed, nor shall anything I say in the above answer or elsewhere on this site be deemed legal advice, even to someone who resides in a state in which I am licensed. Funds I receive from JustAnswer.com are gratuities paid to me for taking the time to respond to questions, not for legal advice. This forum is designed to provide general information only, and information herein is not warranted to be correct or applicable in any way since laws may have been misinterpreted herein, since laws change from time to time, and since the impact of those laws on any particular situation varies. The information presented in this site shall not be construed to be formal legal advice nor the formation of an attorney-client relationship. Persons accessing this response are encouraged to seek independent legal counsel in their jurisdiction for guidance regarding their individual circumstances. Do not take any action or inaction based on information presented herein since it is informational and may not be accurate or applicable to you; it merely attempts to give you a basis of knowledge to help you formulate questions to ask a legal or other professional in a face-to-face meeting in your jurisdiction. JoeLawyer is an attorney but does not hold himself out to be a specialist or expert in any area, regardless of assertions made by any third party, and any implication of being an expert or specialist herein is made in error. I hope the information presented above is useful to you. Answer above is (c) JoeLawyer. All rights reserved.
Customer: replied 1 year ago.

Thank you for your detailed answers. My wife does not list me as a creditor on schedules d,e, or f. Although, I am listed as a creditor on her Verification of Creditors Matrix. I'm guessing I'd have an uphill battle using her creditor matrix to establish I'm a creditor.

The case has been reopened by my wife, so it sounds like my best option is to contact the trustee. In your experience, how willing are trustees to follow through on cases like this?

Thank you

Expert:  JoeLawyer replied 1 year ago.
No problem, I'm happy to help. I'm sorry it took so long to respond the first time, that took awhile to type...

Since your wife already reopened the bankruptcy, and if the case has not closed again yet, then that's great since that will save you the reopen fee.

Trustee are often very interested in hearing if debtors failed to be honest with them. I think that is a great idea: telling the trustee may cause the trustee to pursue revocation and save you from having to go through the complicated and potentially expensive Adversary Proceeding process.

More often, though, if the court establishes that the debtor failed to list income, if the debtor can make a case that it was an oversight or honest mistake, the court still won't revoke discharge. But, if the additional income is so significant that the debtor would not have qualified for a Chapter 7 discharge had the income been reported, then the court may very well revoke discharge or essentially force the debtor in to Chapter 13 to make payments to the trustee for 3 to 5 years.

It's really hard to tell you what to expect; this is one of those "crystal ball" situations since courts issue rulings based on very specific criteria on a case-by-case basis, and all judges are different. But, if she really hid $2,000/mo in income, then I would not want to be her trying to explain that.

Joe

LEGAL NOTICE: I am only licensed to practice law in certain state(s) and I cannot give legal advice to someone who does not reside in a state in which I am licensed, nor shall anything I say in the above answer or elsewhere on this site be deemed legal advice, even to someone who resides in a state in which I am licensed. Funds I receive from JustAnswer.com are gratuities paid to me for taking the time to respond to questions, not for legal advice. This forum is designed to provide general information only, and information herein is not warranted to be correct or applicable in any way since laws may have been misinterpreted herein, since laws change from time to time, and since the impact of those laws on any particular situation varies. The information presented in this site shall not be construed to be formal legal advice nor the formation of an attorney-client relationship. Persons accessing this response are encouraged to seek independent legal counsel in their jurisdiction for guidance regarding their individual circumstances. Do not take any action or inaction based on information presented herein since it is informational and may not be accurate or applicable to you; it merely attempts to give you a basis of knowledge to help you formulate questions to ask a legal or other professional in a face-to-face meeting in your jurisdiction. JoeLawyer is an attorney but does not hold himself out to be a specialist or expert in any area, regardless of assertions made by any third party, and any implication of being an expert or specialist herein is made in error. I hope the information presented above is useful to you. Answer above is (c) JoeLawyer. All rights reserved.
JoeLawyer, Attorney
Category: Bankruptcy Law
Satisfied Customers: 767
Experience: Attorney in the practice of Bankruptcy Law since 1996
JoeLawyer and other Bankruptcy Law Specialists are ready to help you
Customer: replied 1 year ago.
Great. Thanks again for your time.
Expert:  JoeLawyer replied 1 year ago.

No problem, and thank you for the Accept, I appreciate it.

Bankruptcy Courts are somewhat forgiving though, at least in my experience. I had clients who didn't tell me they owned some real estate for fear of losing it in their bankruptcy. This was maybe 10 or 12 years ago, before I could check that stuff online like I do now.

Somehow, the trustee found out they lied about it and hid it, and he called me. I was dumbfounded, but I managed to keep them out of prison and even kept their case from getting dismissed and they still got their discharge, but they did lose the real estate (it was sold and the money was given to creditors). They were happy not to go to jail, but if they had told me about the property, I could have put them in a Chapter 13 and protected it, but sometimes people do less-than-brilliant things.

In any case, if your court is as forgiving as mine, if she can show it was an accident, and the $2,000/mo still won't give her significant disposable income, then you may get nothing for your trouble. But, I would certainly let the trustee know and see what happens.

Joe

LEGAL NOTICE: I am only licensed to practice law in certain state(s) and I cannot give legal advice to someone who does not reside in a state in which I am licensed, nor shall anything I say in the above answer or elsewhere on this site be deemed legal advice, even to someone who resides in a state in which I am licensed. Funds I receive from JustAnswer.com are gratuities paid to me for taking the time to respond to questions, not for legal advice. This forum is designed to provide general information only, and information herein is not warranted to be correct or applicable in any way since laws may have been misinterpreted herein, since laws change from time to time, and since the impact of those laws on any particular situation varies. The information presented in this site shall not be construed to be formal legal advice nor the formation of an attorney-client relationship. Persons accessing this response are encouraged to seek independent legal counsel in their jurisdiction for guidance regarding their individual circumstances. Do not take any action or inaction based on information presented herein since it is informational and may not be accurate or applicable to you; it merely attempts to give you a basis of knowledge to help you formulate questions to ask a legal or other professional in a face-to-face meeting in your jurisdiction. JoeLawyer is an attorney but does not hold himself out to be a specialist or expert in any area, regardless of assertions made by any third party, and any implication of being an expert or specialist herein is made in error. I hope the information presented above is useful to you. Answer above is (c) JoeLawyer. All rights reserved.

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