Legal Question in Bankruptcy in Florida

Dear LAWGURU- Today, I had my Bankruptcy Chap. 7 "Creditors Meeting" with the trustee. It didn't go as well as I would have thought... I feel I got railroaded... The trustee asked me questions, and I really feel that he didn't take into account of my situation... I'm unemployed, my mortgage is in pre-foreclosure, and I'm living on very minimal money. I'm also receiving foodstamps... I don't mean to rattle on, but I want you to understand my issues. My Grandfather passed away last November, and my Dad said that some inheritance money would be coming, but it would take some time, to be settled with the trust and probate. I received the funds of $5,000.00 AFTER I filed for Chap. 7 Bankruptcy. I explained this to the trustee... My debt is over $100,000.00... The trustee wants me to mail him a check for $3,500.00 towards my debt. He said that he didn't want to discuss anything anymore. He said that if I didn't agree to the terms, he could put a lean on my home, or just deny my Bankruptcy Chap. 7 filing, and cancel... I tried to talk with him... I explained to him, that this money is helping me with my general utilities, and bills and gas for my car. I explained to the trustee that the magnitude of my debt is enormous, compared to the ("peanuts" $5,000.00) I received. I claimed this $5,000.00 as "exempt" on Schedule C as an amendment (because I received the funds after I filed). So, my question to you is, "what can I do to get this trustee decision overturned legally?" Thank you, James


Asked on 9/03/09, 9:02 pm

1 Answer from Attorneys
Brent Rose The Orsini & Rose Law Firm

When you file bankruptcy, your "estate," that is, all the stuff you own, including everything you can claim as exempt, includes everything that is due to you even after you file for bankruptcy. You were owed the $5000 when you filed, so it was part of the "estate."

For instance, if someone owes you a million dollars, and your debt is $100,000, you can't just hurry and file bankruptcy before the check comes in. Your "estate" still includes the million that you are owed.

Your debt isn't $100,000 right now, it's zero because it all got discharged (erased) by the bankruptcy filing, so that's a pretty crappy argument. It doesn't matter that the $5000 will help you pay your living expenses. I'm sure it will, but the $5000 isn't exempt because bankruptcy law only allows you to keep $1,000 worth of stuff (including cash) if you have a house. You get the $1,000 worth of stuff you've already claimed. You can't add the $5000 to it. There is no such thing as an "after filing" exemption. Exemptions are homestead, head of household, retirement, etc. You claimed a nonexistent exemption. At least the trustee was nice enough to settle with you for only $3500 instead of the whole $5000.

It may be worth sitting down with a bankruptcy lawyer to see if there is any way out of this, but it sounds to me like the trustee is right. You may want to ask the lawyer about dropping the homestead exemption if you plan to let your house go to foreclosure. That will give you an extra cash exemption amount, and you may be able to keep the $5,000.

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Answered on 9/04/09, 7:58 pm


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