Expert: Terry Leeders - 11/15/2007

Question
Hello Mr. Leeders,

So glad I found this site! I would appreciate any advice you could give, as I cannot afford an attorney and am on the verge of a meltdown here!

I have several questions concerning my Chapter 7...

I filed 7 in 10/05 and was discharged almost 3 months later. I own property which I disclosed, but did not disclose the house sitting on the property which had/has a personal loan against it which repaid the construction loan to build it, that is in my mom's name ~ my poor credit would not allow a mortgage. My sister (who is on a personal vendetta against me) wanted to get the loan paid off and the funds put back into my mothers estate, filed a quick claim deed 1/07 in my mothers name (she has mom's power of attorney) to the property trying to return it to my mom, so it could be sold. If the loan is in my mom's name for the house, can the house be sold through/against my bankruptcy?

In turn this sent up a red flair with my trustee, who re-opened my case and is now in the fueled process of wanting to sell my home to repay my creditors and her own admin fees which have already reached a whopping $14,000 in a short time span. She sent out a letter to my creditors with a deadline of August 20th to file and I only had $10,000 worth of the original $70,000 to return on me for payment.

To make matters worse, my sister has hired an attorney (behind my mothers back) who has made $348,00 worth of claims to my backrupcty at the last minute trying to recoup every dime my mom has ever given or loaned me or my sons since our births. Is that allowed? None of those claims her attorney filed were on my original backruptcy filings.

I am at such a loss here and feeling my way in the dark to resolve this with the trustee, but she is rude, short & disrespectful to me. I am sure she has done thousands of these and is hard core, but this is my 1st (and LAST!) She is not willing to answer any of my questions and simply refers me to an attorney she knows I cannot afford. :(

Can I fight the selling of my home and set up payments to pay creditors and trustee fee's if my mother will document she wants the claims removed from the chapter 7, so we can handle on a personal level instead?

I know this is a mess and a lot to take in, any in sight or advice you could offer would be a blessing...

Regards, Megan E.  

Answer
Hi Megan,
You should contact your bankruptcy lawyer immediately for advice, or get one if you filed pro-se.  The trustee's job is to administer any unexempt assets you may have in order to pay your creditors.  If the bankruptcy petition inaccurately reflected the value of the home, the trustee can reopen the case to liquidate the assets.  Also, preference payments to insiders and transfers of assets done just before or during a bankruptcy need to be disclosed in the case, and can be reversed by the trustee's powers.  

As for the claims, your attorney can object to the claims filed by your sister/mother.  They would have to prove the validity and amounts.

Unfortunately, this could get ugly since you may lose the home and have the family disputes tied into the middle.

I would call your attorney, there are options you may have, including a petition to convert the case to Chapter 13 whereby you might be able to pay back a % of the debt over 5 years in order to protect the home from liquidation.  There are a lot of factors to review, so I would seek help as soon as possible so that you can protect yourself.