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Can a trustee sue me for money I would have owed her even if she revoked my bankruptcy ?

Canton, OH |

I will try and be brief . 2010 I filed bankruptcy and it was discharged November 2010 . She requested 2008 and 2009 tax returns then ? I didn't know I was going to get any return because I still owed back taxes from my ex husbands business , but for some reason did get a return . I cashed it my attorney told me to ! I payed off attorney fees with it . Then she states I owe her that money ! She wouldn't take payments of any kind canceled my hearings , revoked my bankruptcy Feb 2012 and is now sewing me for that money still ? ? Can she do this ?

Attorney Answers 3

  1. Best answer

    Attorney Berkus is correct. But I am surprised that an attorney would advise you to pay fees to him or her from estate assets. If that is true, I think the bankruptcy judge and U.S. Trustee ought to be informed.

    You do not provide any details about the amount of the money involved. It seems like it might be substantial if the trustee went to the effort of undoing your discharge, not accepting a payment arrangement and then suing you.

    Bottom line is that the trustee is seeking the return of assets that you diverted from the estate to a non-estate creditor. Regardless of your intent or knowledge, you are liable for the return of those funds.

    To me, besides putting you into a bad situation, if what you describe is true, then your (former) attorney put you into a grievous situation.

    Good luck. For some reason the Trustee sounds very hostile to you -- whether something happened in the case or she simply has no confidence in you. Maybe your new attorney can help smooth things over.

    Good luck.

  2. Short answer, yes. Note, this situation is very very bad. Maybe you need to consult with different bankruptcy counsel.

    Technically, your bankruptcy is still open. Sounds like the trustee revoked your discharge. So, what this means is that you still owe the money to the creditors you included in the bankruptcy (unless or until a discharge is reinstated) and the trustee is going after you for assets that should have belonged to the bankruptcy estate.

    A discharge is not the actual end of a bankruptcy. Your bankruptcy case does not end until it is closed.

    In any event, you need to get with a bankruptcy attorney yesterday to start sorting things out, the goal for you is the preserve or get your discharge reinstated.

  3. If you had unfiled tax returns at the time you filed - and it sounds like you did - any refund you would be entitled to would be an asset of your bankruptcy estate, and needed to be listed as such on Schedule B. You may have also been entitled to exempt the refunds and protect them, if Ohio allows use of the federal exemptions, and you had sufficient exemptions to cover the refunds. With late filed returns, once the return becomes available, you should have given your BK attorney copies, so he could amend your schedules and protect the assets if possible. You are now more than 2 years past the discharge, much has happened, and the facts are sketchy from your description. You need to meet with a different bankruptcy attorney who can advise you if there is a way out of this mess, and how much it is going to cost you. Good luck!

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