Legal Question in Bankruptcy in California

Chapter 7 case dismissal?

I am a creditor in a bankruptcy case. I have 2 judgments secured by recorded liens against the debtor's property which I also have the 1st deed of trust on. (carry back sale). The debtor filed bankruptcy in Feb 09 just to stop the wage garnishment already in place to collect on the juggments. On April 8th the judge granted me the relief from automatic stay to proceed with the foreclosure on the property since the debtors are 5 months behind and failed to respond to the motion. The meeting of creditors has been continued 3 times already; the first two because neither the debtor nor debtor's counsel appeared and this last time because the trustee confirmed the schedules were completely false during the examination. She gave the debtor 3 weeks to ammend the schedules and we are due back May 6. The debtor hasn't filed the ammended schedules with the court and I was wondering if I can file anything to resume the wage garnishment before the meeting of creditors is concluded? I know for a fact the debtor wouldn't have passed the means test if she would've been truthful on her schedules. Who determines if a case warrants further investigation for fraud? Is it solely at the discretion of the trustee or can I file papers to dismiss?


Asked on 4/28/09, 8:16 pm

1 Answer from Attorneys
David Gibbs The Gibbs Law Firm, APC

Re: Chapter 7 case dismissal?

You may not resume wage garnishment so long as the case is active, and the automatic stay is in place. If, at the May 6, 2009 Meeting of Creditors, the debtor fails to file the amended schedules, then the Trustee will almost certainly move to dismiss the case. Only after dismissal can you resume your wage garnishment. You cannot obtain relief from the automatic stay to resume your wage garnishment (there just isn't a legal basis for doing so), so you will have to wait for the case dismissal before proceeding. Be careful of a conversion - that may be the debtor's next step to drag this out longer.

*Due to the limitations of the LawGuru Forums, The Gibbs Law Firm, APC's (the "Firm") participation in responding to questions posted herein does not constitute legal advice, nor legal representation of the person or entity posting a question. No Attorney/Client relationship is or shall be construed to be created hereby. The information provided is general and requires that the poster obtain specific legal advice from an attorney. The poster shall not rely upon the information provided herein as legal advice nor as the basis for making any decisions of legal consequence.

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Answered on 4/29/09, 12:04 pm


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