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Blazing Ownager
Jun 2, 2007

by FactsAreUseless
Hey everyone ; I think this is the right place to be asking this. I am asking on behalf of my soon to retired mother, however, as I am having a bit of a hard time googling any information on what, if anything, can be done.

Long story short, my mom had a faulty medical procedure a while ago and was in a class action lawsuit. She had to declare Chapter 7, and when she did, the lawsuit wasn't added to it (largely because she never thought anything would come of it and put it out of mind). As a result, they re-opened her case and absorbed 100% of the money, which was only around $10,000.

That sucks, but it's not why I'm posting this asking for advice. Today she got a notice, and the Trustee's Compensation Request has tacked on fee after fee, and now lists her as owing nearly seven thousand dollars for the work of distributing the ten thousand dollars attached to a "Summary of Trustee's Final Report and Application for Compensation."

If there any way to fight this in court? Essentially months after this was done this popped up like a land mine and instead of giving her any money out of it it's now costing more than she can afford. Anyone familiar with this would be extremely helpful if you could point me at anything to do to possibly lower this insane fee.

Thank you all again for any help or directions you might point me in.

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Agronox
Feb 4, 2005
Unfortunately this seems so fact-specific that the best advice someone here can give you is "talk to a bankruptcy lawyer."

Omerta
Feb 19, 2007

I thought short arms were good for benching :smith:
Hi, I'm a lawyer, though I don't practice bankruptcy anymore. First and foremost, go talk to a bankruptcy lawyer in your jurisdiction.

I'll explain generally what happened, but I'm not giving you legal advice because I don't know poo poo about the specifics for what's going on here.

Think of bankruptcy like a timeline of your mom's life, with the bankruptcy dividing your mom's pre- and post- filing existence. Everything pre-bankruptcy belongs to the bankruptcy estate, which can be used to pay off creditors. That includes pre-bankruptcy stuff that would give your mom the ability to get money, even if she can't actually get it until after the bankruptcy (that's called a "unliquidated contingent" claim).

That settlement was a contingent claim that your mom didn't disclose. Even though she didn't get the money until after the bankruptcy, the actions that created the money occurred pre-bankruptcy. So the money from the settlement could have been used to pay back creditors.

What the trustee did was reopen the bankruptcy case to take that money, which should have been listed as an asset, to pay fees and creditors.

As you might imagine, saying "I didn't think this was worth anything" is not an excuse. When you file for bankruptcy, you have to list all your assets, including legal claims.

If you want to google around, the magic words are "trustee reopen case and undisclosed assets"

You should go talk to a lawyer to see how your jurisdiction handles this and how to contest it. It varies pretty significantly from circuit to circuit. You might be able to get this reduced or something, but your mother screwed up by not listing her claim.

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