Selling a home in a chapter 13

[womanonfire]

Does the trustee get 10% of the sale? Does this need to be as an option in the plan, right to sell or intend to sell? I know it has to be approved so motion work will be necessary.

Thanks for the feedback!

[justbroke]

Chapter 13s operated much differently than a Chapter 7. In a Chapter 13, the debtor can sell the home and buy another and it's possible that nothing has to be paid into the bankruptcy estate. The simple fact is that the Chapter 13 Trustee doesn't get paid, unless they pay a creditor. Crazy, huh? They get a percentage (10% generally) of things that they pay. So unless your proceeds were subject to becoming property of the bankruptcy estate, then the Trustee would get 0%.

Most people sell so that they can payoff their Chapter 13. Others sell because they're relocating and/or buying a new property. In cases where the debtor is simply moving, it is not likely the Chapter 13 estate will see proceeds. But if you're not buying another house then the proceeds, after the commissions and other costs, could end up in the Chapter 13 estate. Then the Trustee can spend that money and receive their commission.

(Chapter 13 Trustees don't make more than a Level V Executive in the Federal government. They have many costs including maintaining an office staffed with attorneys, customer service reps, and even an accountant or two. They spend a lot of time in court and can't make nearly as much as 'possible' as a Chapter 7 Panel Trustee. But, it can be a very good living as a Chapter 13 Trustee. I think Level V Exec is equivalent to a congressperson's pay. About $160K a year.)

[Zombie13]

womanonfire, Just 'liking' the posts to show support. You are asking all the right questions, considering all the likely possibilities, poring over all the data. I believe you will get this resolved with the BK system.
Ok; take it easy, and thanks for reading.

[womanonfire]

Chapter 13s operated much differently than a Chapter 7. In a Chapter 13, the debtor can sell the home and buy another and it's possible that nothing has to be paid into the bankruptcy estate. The simple fact is that the Chapter 13 Trustee doesn't get paid, unless they pay a creditor. Crazy, huh? They get a percentage (10% generally) of things that they pay. So unless your proceeds were subject to becoming property of the bankruptcy estate, then the Trustee would get 0%.

Most people sell so that they can payoff their Chapter 13. Others sell because they're relocating and/or buying a new property. In cases where the debtor is simply moving, it is not likely the Chapter 13 estate will see proceeds. But if you're not buying another house then the proceeds, after the commissions and other costs, could end up in the Chapter 13 estate. Then the Trustee can spend that money and receive their commission.

(Chapter 13 Trustees don't make more than a Level V Executive in the Federal government. They have many costs including maintaining an office staffed with attorneys, customer service reps, and even an accountant or two. They spend a lot of time in court and can't make nearly as much as 'possible' as a Chapter 7 Panel Trustee. But, it can be a very good living as a Chapter 13 Trustee. I think Level V Exec is equivalent to a congressperson's pay. About $160K a year.)

I guess a conversion camper van would not be considered a house lol. Or I can't use the money to buy property and put a house on it? Either way, in my case, looks like the Chapter 13 trustee would get fees from the sale so not much difference than a Chapter 7.

[justbroke]

The Chapter 13 Trustee doesn't get fees from the sale directly. They would only be able to earn commission on any money you have to put into the Chapter 13 bankruptcy estate and upon them paying a creditor. In a Chapter 7, the Chapter 7 Trustee is usually the person actually selling (liquidating) the property. They are much more involved.

[GibsonSG]

I am wondering if anyone can elaborate on how long it takes for case dismissal after a Ch 13 plan is 100% paid off due to the sale of a home. I sold my home 10 weeks ago and the entirety of my Ch 13 debt was paid off from the equity proceeds. The payment posted to NDC 7 weeks ago, but there have been no further disbursements within my account. My attorney would only tell me that this does take time, but I would really like to know how much longer I can expect to wait until this is closed.

[justbroke]

Welcome to BKForum.

Unfortunately, it literally does take time. The biggest part, right now, is that the Trustee must send out checks to all of the creditors with allowed claims. They must pay your attorney, themselves, and any other priority or administrative expenses. They then must wait for every single last check to clear. That usually means that they send out checks, and then wait at least 30 days for the checks to clear. If a single check is returned, they must reconcile and decide what they are going to do.

They must also perform a closing audit to make sure that everything was paid and that there is not a single penny left in the estate's account. Then they can file the final report and the case will be closed.

So, no one can tell you the exact date. The Trustees usually make payments only monthly (once a month), and you may have caught them right between a cycle (they have to wait for payment to clear as well before they make payments to creditors). There are so many things that happen from an accounting standpoint, you'll just have to wait and see if they start sending checks out to the creditors. From that point I would say it's at least another 30 days.

It can take 60-90 days in a normal Chapter 13 form the date of the last payment, to the close. Given the pandemic, it could be even further delayed.

[womanonfire]

I seriously send out paper checks?