QUESTION
Can the bankruptcy trustee threaten us with court for his mistake?
Asked on Feb 11th, 2013 on Bankruptcy - Delaware
More details to this question:
We had a "no assets" chapter 7 discharged in January 2012. The only asset the trustee found was a truck payment from the sale of a vehicle to a family member. This was fully disclosed in the original filing and the payments have been going to the trustee. No other restrictions were put on us. They did not claim the tax refund we were anticipating, and fully disclosed. Now in January 2013, we are informed that the trustee was audited and our case was one of the reviewed. The trustee was told that he should have taken our 2011 tax refund. Now he wants $1700 from us or he will ask the court to revoke our discharge. We don't have this money. We are not getting a refund for 2012. Our lawyer says he had never had this happen before. I understand the trustee has a lot of leeway. But can he come after us for this mistake?
2 ANSWERS
The trustee has broad powers under the bankruptcy code. These include to power to sue. You should seek counsel to help you defend (if you feel it is worth it) against his claim. It would probably be less expensive to pay him. You could litigate it and then possibly lose. On the other hand, he could be bluffing, but I wouldn't rely on that. Ultimately, it's your call. Good Luck.
Answered on Feb 13th, 2013 at 5:09 PM
Estate Planning Attorney serving Wilmington, DE
at
Reger Rizzo & Darnall, LLP
Update Your Profile
Unfortunately he can.
Answered on Feb 13th, 2013 at 11:36 AM