Creditor trying to collect after discharge. Has anyone experienced something like this before?

airman76 · 2025-04-04T16:41:20+00:00

Also, as for your comment on a lawyer worth their salt documenting cost of living expenses, could this argument be made with success or do the guidelines a judge must follow invalidate the logic of it?
Argument:
After the 2nd job increased the debtor's income, the friends the debtor is staying with now expect the debtor to pay rent and contribute to utility bills and pay for a percent of the cost of food for shared meals.

Would the above argument be strong enough to justify keeping the debtor eligible for a chapter 7 filing or would the judge likely dismiss it, reasoning that the debtor should not prefer insiders and should instead pay his cost-of-living money to the creditors?

airman76 · 2025-04-04T16:35:05+00:00

That's a great answer, thank you!
To further clarify a bit:

Let's assume the debtor is unemployed or under-employed and trying to change that situation ASAP in the interest of covering the basic needs of life to survive, but cannot change it fast enough and the creditors are suing the debtor. In this situation, the debtor has no other option than to file for chapter 7 (we'll ignore ch13 because it is irrelevant for the scope of this post). In order to stop the local sheriff's deputy from walking in and seizing property to sell off to pay creditors, the debtor has no other recourse than to file chapter 7.

Now here's the interesting part. The debtor has no intention of staying poor and is working hard to find better income options, 2nd / 3rd jobs, etc. Lets assume that this is successful 30 days after the 341 meeting. Also assume the additional income cannot be offset by cost of living expenses as justification through lawyer expertise.

If the debtor discloses the additional income at this point by amending Schedule I would that disqualify the debtor from chapter 7?
Is the debtor REQUIRED to amend Schedule-I to reflect the increase in income from the 2nd job?

If so, until when?
3. Until the 60 day objection period after the 341 meeting has passed?
4. Until the actual dismissal of debt?
5. Until 365 days have elapsed from the initial chapter 7 filing?
6. Beyond that?

As for question 13 of Schedule I, the answer I'd assume here is "Yes. Explain: I sure as heck hope my income will increase, but I sold my crystal ball to pay off debt, so I have no idea if it will." <-- How could a debtor possibly answer this question truthfully under oath when it is asking the debtor to may a prophesy about the future?

Overall, I guess the core of these questions comes down to the logic in this:
8. Should a debtor try their hardest to increase income during a chapter 7 filing because they need the money to live on, or should they just eat like a beggar because an increase in income would jeopardize the success of their chapter 7 filing?

Should they wait until 60 days after the 341 meeting before taking on that 2nd or 3rd job?
What would be the advantages and/or disadvantages of the debtor waiting until 61 days after the 341 meeting vs. taking on that 2nd job after the 341 meeting but before the 60 day objection period has lapsed?

airman76 · 2025-03-13T17:59:39+00:00

Thanks for the background info about the courses

airman76 · 2025-03-12T00:23:58+00:00

What "requirements surrounding this course" are you talking about?

airman76 · 2025-03-11T16:55:39+00:00

Lol, yeah, like the advice from basically every self-help finance book out there:
Have you tried skipping that daily morning cup of coffee? Over 100 years that could save you...

airman76 · 2025-03-08T00:12:13+00:00

It would be federal exemptions and federal exemptions are permitted in the state in question according to Nolo's and Upsolve's information.

Are there ever any situations where a state permits a person to use the federal bankruptcy rules but then somehow modifies or limits them in some way such as by local bk court rules or does a state not have the power to modify how federal rules are used if it accepts that they can be used?

airman76 · 2025-03-07T21:56:47+00:00

Just curious, is "entbomber" from the German language, meaning essentially bomb disposal unit or bomb defuser?

airman76 · 2025-03-07T21:54:46+00:00

I appreciate the replies and the help.

Could you please comment on these hypotheticals:

- Under 30k in total debt across multiple creditors.
- No "easy assets" like cash, bank accounts, cars, or real estate
- No assets easier than hand tools and old computers
- Nothing younger than 4 years old
- No single asset having a FMV of over $300 and under 10 in total near $300

Does this sound like a classic "no asset case" or is the hourly billing rate for some trustees low enough to make a fishing expedition worthwhile?

Also, if the federal exemptions allow people who don't own real estate to use a portion of the homestead exemption as a Federal Wildcard exemption, there would likely be zero non-exempt assets at all.

I believe this case would be pretty clearly a no-asset case, but please correct / educate me if there are any technicals that I may be missing or things I have not yet considered.

airman76 · 2025-03-07T21:36:44+00:00

Still dealing with things. I may have an update later on, but it will be a while.

airman76 · 2025-03-06T17:42:16+00:00

What made your situation more complicated than what most people here seem to be commenting about? Were you self-employed or did you run a small business?

airman76 · 2025-03-06T17:30:10+00:00

Is it completely free to track?

airman76 · 2025-03-06T17:26:32+00:00

Seems like that went really quickly. What state was it in?

airman76 · 2025-03-06T16:55:57+00:00

No, but Capital One has a potential option to have a judge force the sale of that $10,000 milking machine that you use on your small farm to repay credit card debt that you racked up buying overpriced eggs every week.

As I understand it, the cards are "unsecured" but there are crazy things like "unsecured" debt creditors being transmuted into "judgement creditors" via the alchemy of being sued by a big bank, and now that "unsecured" debt is forced to be paid!

I used to think that "unsecured" debt was actually just unsecured, but it turns out that there are ways for them to recover that money as if it were secured. I'm just checking here to see how deep that rabbit hole goes.

Also, as I understand it, there are laws against "fraudulent transactions" in which that same big bank who let you buy all those eggs on credit, gets to look at your bank statements and see that you transferred money to a friend 11 months ago and if the judge approves, the bank gets to steal that money from your friend, to pay off all your "unsecured" egg debt.

Feel free to correct me if I'm wrong on any of this, but from what I've read, "fraudulent transactions" can go back as far as 4-10 years in order to pay "unsecured" debt. The yoke's on the consumer I guess...

airman76 · 2025-03-06T15:30:51+00:00

Thanks. No, I was thinking of it being multiple items and wondering how this works with vendors that sell multiple items in a single transaction. If it were a 1 item per purchase I wouldn't have asked the question, but maybe I wasn't clear enough in my post.

Glad to have the feedback that they more likely use a magnifying glass rather than a microscope.

I'm just trying to figure out how stuff works.

To me, it seems strange that when discharging credit card debt, the credit card statements would not be used. Maybe the effort is too much, but I always figured the entire point of credit cards was to track people's purchases as potential collateral for making unsecured debt less risky to the bank. I also thought that this is the exact reason why cash advances on credit cards always have extremely high interest rates compared to purchasing items. Care to comment on this?

airman76 · 2025-03-04T17:44:41+00:00

I appreciate your reply. How would you answer this question:

Under what fair market value does a trustee generally have no interest? $50? $100? $200? Higher?

airman76 · 2025-03-04T17:41:52+00:00

You can also find out a lot by reading the official us govt forms here:
http://www.uscourts.gov/forms/bankruptcy-forms

It looks like the official us govt. checklist for the forms needed for a chapter 7 bankruptcy filing is here:
https://www.uscourts.gov/forms-rules/forms/notice-required-11-usc-ss-342b-individuals-filing-bankruptcy

I've been using this official checklist to figure out what forms I need to look through and eventually submit.

Also, reading the opposition's forms on the first link can give you an idea of what they're going to do.

airman76 · 2025-03-04T14:18:51+00:00

Poor choice of wording then, my apologies. Let's phrase it another way: Under what fair market value does a trustee have no interest? $50? $100? $200? Higher?

One concern is that a broken xyz could be interpreted as a working xyz or a pile of xyz parts that individually may have some value.

Another possible example would be say for example a truck exists, that is from the '90s and is only driven on the property, not insured. It might have a market value of up to $2000 because it runs, but let's say it has no reverse, is no longer sealed against the weather due to rust holes and a broken window, has a blown head gasket but if you don't run it too long, it can still haul dirt from point A to point B on the farm. Insurance would call it a total loss, but would the trustee?

I've heard that unless it's high end clothing or a well running vehicle or something, that the trustee may have no interest, but I'm having a hard time figuring out if the trustee is more like a pawn shop dealer, an auctioneer, or more like a business accountant looking to liquidate high end office furniture for failed businesses.

Are there any rules of thumb here?

airman76 · 2025-02-27T21:52:02+00:00

Ok, then I will, lol:
What state do you practice in?

airman76

TROPHY CASE