Report of No Assets in a Chapter 7

 

SOMF Asset Patterns

Image via Wikipedia

Most Chapter 7 cases filed are no asset cases, but there is a standard procedure used by a federal bankruptcy court to determine whether or not a case is in deed a no asset case.

Listing Your Assets in a Chapter 7

You as a Chapter 7 filer must list all of your assets on the Schedule of Assets and Liabilities when you first apply for bankruptcy protection. The detailed list will help the bankruptcy court determine whether or not the case will be an asset case or a no asset case. A no asset case means all the assets you have listed are exempt from liquidation under a Chapter 7.

Filing the No Asset Report

According to one U.S. Government bankruptcy website, normally, the bankruptcy court trustee will file a no asset report with the court sometime after the 341 meeting of the creditors indicating there will be no distribution to unsecured creditors. Within a certain time frame thereafter, the trustee will close the case.

The key word here used by the government website is “normally.”

One such debtor who filed a Chapter 7 blogged these questions that were recently posted on a bankruptcy forum website: “I received a discharge in my chapter 7 case in early March 2010. The case is still open. Where in the filed documents is there a trustee determination of an asset or no asset case? I looked on PACER and see no document described either way. Can a trustee sit on this Ad infinitum without making some sort of official determination?

According to the same government website, the information is reiterated that “most Chapter 7 cases involving individual debtors are no asset cases. But if the case appears to be an “asset” case at the outset, unsecured creditors must file their claims with the court within 90 days after the first date set for the meeting of creditors, and governmental units have 180 days from date the case is filed to open a claim.” Unsecured creditors must file a claim in order to receive a distribution by Chapter 7 rules.

Why a No Asset Report May Not Be Timely Recorded

If a bankruptcy trustee suspects there may be non-exempt assets that will come to light after the debtor files his schedules, the trustee may wait a significant time frame before filing any kind of a no asset report to the court. The government bankruptcy court website stated: “If the trustee later recovers assets for distribution to unsecured creditors, the Bankruptcy Court will provide notice to creditors and will allow additional time to file proofs of claim.”

The no asset report is usually a private report made by the trustee to the bankruptcy court, and if there is no suspicion of abuse or future non-exempt assets, the report is usually made within 10 days of the 341 meeting.

You do not always get a public announcement about a no asset case until the bankruptcy is closed. Since bankruptcy records are public information, you can usually access PACER under the History Docket to get the no asset report if it has been made.

 

 

 

Enhanced by Zemanta
The following two tabs change content below.