Chapter 7 Asset Case — Turn Over The Car Early?

[NearlyThere]

Hey everyone! This forum has been very helpful and I’ve learned a lot perusing the threads. I’ve finally filed Chapter 7 today and my attorney has informed me that we got the “most aggressive trustee”. I’m exempting $9k in cash, some household goods and $1.4k in car value. The car is worth $11k in today’s overvalued used car climate and my lawyer is certain that this trustee will take the car. I’m fine with this, as I’d opted to keep as much cash as possible and to just finance a replacement beater. My lawyer has suggested that we contact the “aggressive” trustee asap, to see what he wants to do with the car and it turns out that the trustee wants to have an auctioneer pick it up by early next week. We still have four weeks until the 341. Is this normal? My lawyer says that the trustee would be upset if we didn’t contact him by tomorrow, since the trustee would want to take and protect the car from “potential damage” until the meeting. The trustee also stated that it’d be okay for me to use exempted funds to get a replacement car and my lawyer said that they wouldn’t sell my old car; but they’d essentially be holding it somewhere. Would they sell the car before the 341 meeting? What if the case got dismissed, or if something came up during the meeting? Would they return the car? My lawyer said that the case will not be dismissed and that they’d wait until the after the hearing to sell it, but I’m curious about anyone’s perspective on this forum.

[justbroke]

This is all standard. To me, it looks like you were not able to exempt but a mere $1.4K of value in the car, so the Trustee wants to sell it. The Trustee will likely not get market value, but the Trustee would have to return to you the exempted amount of $1.4K after the sale. A Chapter 7 hardly ever gets dismissed if there are assets, since that allows the Trustee to liquidate the assets and get paid their commission for getting money for the creditors.

I actually don't think that's an aggressive Chapter 7 Trustee. Any Chapter 7 Trustee that can get an easy $7-8K for the creditors is not being aggressive. This is just how the liquidation aspect of a Chapter 7 works. I don't know of one single trustee that would leave thousands of dollars on the table.

Welcome to BKForum.

[NearlyThere]

justbroke thanks!!! Those comments mirror my thoughts and I’m glad to have the second opinion!

[NearlyThere]

justbroke do you know of any tips on financing a car during Chapter 7? Any do’s and don’ts? I’m also unemployed and I’ve seen online that this could cause difficulty, but I’m looking for used cars under $8,000 and can drop $2,000-$3,000 in a down payment. Do you think one can find financing for $4k-5k during Chapter 7; with those circumstances? I also understand that I might get an interest rate of 20%, but it seems that the monthly payment would likely be $150 or less.

[justbroke]

During a Chapter 7? No I do not. I only did a reaffirmation entered prior to my discharge. Obtaining a reaffirmation loan after filing can be problematic, so I applied just before I filed my Chapter 7 and I was approved at 17%. I refinanced that loan down to 7.49% 6 months after my discharge.

[NearlyThere]

justbroke I checked Pacer today and it says that my case is set to “Asset: No”. But I have plenty of household assets and the car that are unprotected. The auctioneer picked up the car today as well. We have two weeks until the 341 Meeting. Is this “Asset: No” normally updated after the 341 Meeting? Or is this possibly an issue? I’m confused as to why it says no assets, when the Trustee has already arranged to have the car taken and my lawyer says that it’s likely that they’re going to sell it.

[justbroke]

The clerk of the bankruptcy court's office hasn't updated the flag. I can't tell you why it hasn't been updated if the Trustee is already liquidating assets. As your lawyer speculates, maybe that haven't yet determined whether there is any "equity" in the bankruptcy estate.

[despritfreya]

Your Trustee has not yet filed that which will trigger an update to the docket from "no asset" to "asset". First he/she will file a notice that he/she has or expects to have assets to distribute. Then he/she will request the Clerk issue a claims bar date for creditors. (Or visa-versa.) Your Trustee will do this in the ordinary course and such is not related to when your 341 is to be held. Rest assured that this will happen since he/she has already picked up the vehicle.

Des.