for you who want to file BK 7

I found this while doing some research:

Setup and Blackmail. true story on BK7

The trustee and attorney who admitted this is taking place in Judge Manuel Barbosa's court, used this term because in some cases the people are intentionally setup so it appears they are committing fraud. To arrange for the people to "settle" gives the impression that they are guilty, and redeeming themselves. It relieves the trustees from being accused of extortion.

The illegal setup can also be described as a confidence crime. Members of the organized extortion ring in the U.S. Bankruptcy Courts betray the trust of those who cannot pay their debts.

Imagine yourself in a situation where you are hospitalized without medical insurance. You get behind in your mortgage. You try to borrow money against the house, but your credit is awful. The only way to attempt to borrow money to pay your bills is to sign a quit claim so the co-owner of the property can qualify for the loan on his or her credit alone.

You are able to borrow $8,000, but have medical bills of $30,000.00. You consider that paying something to stop the collection process is better than doing nothing. With hope, you anticipate returning to work and being able to repay the loan, as well as the payment arrangements you made with the hospital. However, seven months later, you are still not physically able to return to work.

Maybe you have to find a new job altogether because you had a stroke or heart attack that will not allow you to perform the physical duties you once did.

The collectors are calling with condescending, humiliating comments. You call an attorney, and make an appointment to visit to discuss your financial problems.

The attorney wants to be helpful, so it seems. He asks questions about purchases and bills for the previous twelve months. You tell him the entire story, including the quit claim. He tells you that it is okay, and bankruptcy will not affect your house. He or she will say that legally, it is no longer your house and you don't need to mention it on the bankruptcy.

The attorney recommends that you file Chapter 7 liquidation bankruptcy, and he fills out all the forms for you. Several days later, you come in with all the documents he has requested, unpaid bills, collection letters, and the quit claim.

A month or so later, you are notified to appear for a Section 341 Meeting of creditors. There, for the first time, you meet the trustee. He smiles and asks you questions about the information on the Schedules which your attorney gleefully filled out for you, explained in one minute, and had you sign. You did not understand the fast language, but you trust your attorney.

About two months later, you receive a discharge of debts notice in the mail. Glory Hallelujah! You can now get a fresh start, maybe even survive working a job that pays half of what you previously earned. You sleep peacefully at night.

Ten months later, you get home from work, get the mail, and there is a summons for you to appear in court. The trustee has charged you with a fraudulent transfer of property and alleges that you did so to avoid paying your debts.

It's all a mistake, so you think.

Of course, your attorney will talk to the trustee and get this all explained and remedied. My goodness! You just started a new job two months ago and are on a probationary period. You cannot take off work now. There is too much at risk. You can lose a day's earnings for taking off for court, but the worst thing is that you can also lose your job for taking time off during the probationary period.

You call your attorney. He is not in. You leave a message. The next day, you don't hear back from him. You call again. He is not in. You leave another message. This pattern repeats itself until two days before you are to appear in court. Then, you hear from your attorney, but it is not the news you expect. He tells you that he is either too busy, or not qualified to challenge the trustee's charge. He refers you to another attorney.

You call that attorney who charges $1,000 as a retainer. However, his schedule is tight. He cannot give you an appointment to meet with him until a week after you are to appear in court. He recommends that you go to court and ask the judge for a continuance. He instructs you to tell the judge that you have retained an attorney, give his name, and everything will be okay.

When you walk into the courtroom, the same trustee who previously sat with a smile on his face asking you questions is now a hard faced, abrupt man accusing you of things you never heard of. You address the judge, giving him the information as instructed by your new attorney. However, the judge makes a decision about the trustee's motion, voids what he calls a "fraudulent transfer," and orders that you turn over the house to the trustee within 5 days. He schedules a status hearing for the next week -- two days after your appointment with the new attorney.

You have some hope that the new attorney will understand. However, you feel like a criminal, and you are afraid. The trustee says that you signed a quit claim, transferring the real estate, so you would not have to pay your debts. Of course, you transferred the real estate, but not for the reason he states. Well -- you think the attorney will explain all this and the judge will understand.

When you meet with your new attorney, he greets you saying that he has spoken with the trustee. The case is going to be more complicated than he expected. He will have to adjust his retainer to $3,000.00.

Uh!?! You do not have that kind of money.

The attorney tells you the law. If you transferred property within twelve months of filing bankruptcy, it is bankruptcy fraud. You will have to do what the trustee wants, or he will charge you with contempt of court for not handing over the property, revoke your discharge of debts, and ask the judge to send you off to federal prison.

"But, but-but," you say, "the attorney who filed my bankruptcy said that the house would not be affected in any way. He said I could file bankruptcy and not even mention the house. He said that legally, the house was no longer mine because I quit claimed it."

"Well," the attorney responds, "You gave him a copy of the quit claim. In addition, you signed the schedules taking your homestead exemption. You must have known that the trustee would sell your house."

"Nooooo." you reply. "The attorney asked for the copy of the quit claim because he was to explain to the trustee why I had to sign it. It was to borrow on the house to pay on my medical bills."

"So," the attorney retorts, "you borrowed on the house to pay your medical bills, but did not pay them, uh?"

"I paid what I could. The loan was only $8,000.00 and not enough to pay the bills in full."

The attorney snaps, "Why would you borrow money if it wasn't enough to pay the medical bills in full? That's not a wise thing to do."

Feeling that the attorney has inferred you are stupid, you try to explain, "I thought I would be back at work soon, and able to continue a monthly payment plan, but my employer did not have a position"... the lawyer interrupts".

"Look. You are going to have to turn over the property to the trustee. Your circumstances have nothing to do with bankruptcy law. You broke the law."

Since your original attorney did not inform you of this, you ask, "What about the attorney who filed my bank...?" "the lawyer interrupts again".

"He's not being put on trial. You are. If you don't want to be charged with contempt and face a prison sentence, give the trustee the house. I'll see you in court, and don't forget to make a payment on the retainer by the end of the week. I have other appointments waiting."

You walk out of the meeting feeling like your world just ended. You just paid a thousand dollars to be called a liar and a lawbreaker. Do you look for another attorney? How can you afford another attorney?

Just when you thought you were as disappointed and frightened as can be, you get home to discover that the trustee has summoned your spouse to come to court. He has now motioned the court to demand that your spouse signs over the house to the trustee. He has also motioned the court to hire a realtor to place your house on the market.

Your spouse is now angry with you. Questions fling at you like bullets. "Did you tell that guy what the other attorney said?"

"Yes."

"What did he say? Is he going to tell the judge that you did not transfer the house to avoid paying your debts? Am I going to have to get a lawyer? How can we afford all this?"

You don't know where to begin explaining. It would be like telling your spouse that you just paid a person to abuse and degrade you.

At the next court hearing, the trustee enters a Motion to find you in contempt of court because you have not handed over the property. It has only been two days since you talked to your attorney. Surely, the judge would understand that you could not pursue legal matters on your own to hand over the property during the five day limit he ordered. You have no idea on how to even perform such a task! You would also think, by the courtesy of logic and understanding, that the judge knew you did not have legal representation when you appeared in court. Remember, you asked for a continuance because you just obtained legal counsel?

That makes the trustee and judge no difference. It was a court order. If you disobey a court order, you are in contempt of court. The trustee, however, comes up with a way of explaining why you didn't obey the court. He asks, "Do you own the house?"

Legally, you do not own the house. You signed the quit claim relinquishing ownership in the house. Therefore, your honest answer is "No."

Things are happening so fast that you are dizzy, confused, and feel pressured.

Your spouse calls your attorney, who says he cannot represent both of you. He refers your spouse to another attorney. After paying a retainer of $800.00, the attorney tells your spouse that the property must be given to the trustee. He also tells your spouse that you admitted in court that you do not own the property, thereby making your spouse completely and legally responsible for what happens.

The oldest plan of warfare known to man has now been put into place -- divide and conquer. If they can make the two of you blame each other, then you won't work together.

We have documented evidence in one case, where the trustee wrote the husband saying that the wife was blaming him for spending money the trustee claimed was property of the bankruptcy estate. We also have the wife's answer to the trustee's motion, where she declares not having enough knowledge of the questions, and demanding more proof. If it had not been for the fact that a copy of her answer was filed in case records, the couple might be divorced by now.

Back to the illegal setup ...

You call your attorney, who calls your spouse's attorney, and they meet with the trustee. The trustee determines that he will accept $8,000 to drop all charges and allow you to retain your home. Now, your problem is how you are going to come up with $2,000 to pay the balance of the retainer to your attorney, and $8,000 to pay the "settlement?" Your attorney has an answer. He gives you the name and phone number of a banker. He's already spoken to the banker, and they will refinance your house and give you $10,000.

Folks, this is not a fictional story.