Wednesday, March 24, 2021

United States Trustee Attending Consumer Bankruptcy Hearing—Good News?

https://www.avvo.com/attorney-answers/53548-wi-jay-nixon-1529181/answers.html

Jay K. Nixon, Avvo Rating: 10,  Bankruptcy & Federal Criminal Attorney in Kenosha & Janesville, WI. 

Merely continuing the 341 meeting is routinely done anytime that the trustee lacks desired information.  Recent bank statements are always required, but the trustee might now also have requested older bank records, and the US Trustee's (i.e., the US Department of Justice, parent agency of the FBI) appearance probably might be the reason, since their office routinely does a more in-depth digital investigation than any trustee could.  That might have flagged some irregularity, which does not necessarily mean criminal activity, but sometimes can.   If you are concerned, you should immediately retain seasoned bankruptcy counsel (ideally a seasoned federal criminal lawyer who has served on the US Trustee's Standing Ch 7 trustee panel in the past), since you now have the option of claiming 5th amendment rights; remaining silent in bankruptcy court.  That would lead to a denial of your bankruptcy discharge, but most would agree that liberty is more important. Crimes investigated through bank records could include unreported/illegal income, money laundering, tax or bankruptcy fraud, and numerous other financial crimes.  Non-criminal goals are also common, however, since the US Trustee also enforces the means test, the goal of which is forcing higher income debtors (above the state's median income) into chapter 13.  There, they might have to pay something to creditors, unlike in chapter 7, where payments to creditors are relatively rare.  If the reason is strictly financial, such as encouraging payments to creditors, then financial negotiations and settlements with creditors (and the government) are another possibility, although the complexities of bankruptcy require highly sophisticated counsel with extensive experience in both specialties to conduct such negotiations. 

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