The Significance of Closing an Asset Case

[despritfreya]

I am an asset case. Discharged in June 2010. Have been denied twice for a HAMP loan modification, partly due to mortgage co. insisting I am in active bankruptcy. The TT not abandoning the assets is an ongoing financial burden.
Can I file a motion to compel abandonment or does this need to be done by an Atty.?
If it is DIY where do I go for instructions and forms?

Have you (or your attny) called the Trustee or his/her attny and asked that he/she issue a Notice of Abandonment for the upside down residence?

As to the actual Motion, there is no specific form You are just asking that the property be abandoned as it is burdensome and of inconsequential value to the estate. The Motion must be noticed to all creditors:

http://www.azb.uscourts.gov/Documents/Local_Rule_6007-1c3_Form.pdf

Once the 14 days (plus 3 for mailing) are up, and assuming no one responds, you file a Certificate of No Objection and request that an Order approving the Motion be signed by the Judge. Please note that the fee to file the Motion is $150.00.

Des.

[stanpendula]

Have you (or your attny) called the Trustee or his/her attny and asked that he/she issue a Notice of Abandonment for the upside down residence?

As to the actual Motion, there is no specific form You are just asking that the property be abandoned as it is burdensome and of inconsequential value to the estate. The Motion must be noticed to all creditors:

http://www.azb.uscourts.gov/Documents/Local_Rule_6007-1c3_Form.pdf

Once the 14 days (plus 3 for mailing) are up, and assuming no one responds, you file a Certificate of No Objection and request that an Order approving the Motion be signed by the Judge. Please note that the fee to file the Motion is $150.00.

Des.

This is a very interesting suggestion. We owe on the house 600k and the house is valued at 350k (but the principal is 350k and HELOC is the difference - is borderline upside down, the Trustee might try a sale). We abandoned the property, but we have to pay HOA and other fees. So, I should ask my incompetent attorney to file a notion of abandonment?? hmm...

My case started as a No Asset, but the Trustee found so many ways to take money from us (due to the same attorney and his filling advices) that now we are in a settlement plan and we were declared an Asset case 2 days ago (at least this is what I saw in PACER). We got the discharge in July, but 2 days ago the Trustee sent the Notice to the creditors. Man, it's raining claims since then !!

It seems that I am in for the long wait due to the change in case status ... and today I wanted to sell my old junk car and get a newer one. Thank you for enlightening me (again) and stopping me from doing a stupid thing.

[despritfreya]

We owe on the house 600k and the house is valued at 350k. (The 1st mortgage is for $350k and the 2nd is for $250k) We abandoned the property, but we have to pay HOA and other fees. So, I should ask my. . .attorney to file a notion of abandonment??

1. If you are thinking that by an abandonment you will end your liability to the HOA, your thinking would be wrong. All an abandonment does is remove the property from the bk estate. The property will remain in your name until it is either sold by you (or the trustee) or foreclosed upon by the 1st mortgage. Once the property is out of your name your obligation to the HOA ends.

2. If you are thinking about an abandonment so that you can attempt a short sale, your thinking would be correct. You cannot sell the property without a court order until it is removed from the bk estate. If this is the case the first (and cheapest) thing to do is to request that the Trustee file a Notice of Abandonment.

Hope this helps.

Des.

[stanpendula]

Des,

thank you. It helps. I actually wanted to have it removed from bk estate and by doing that to give green light to BofA to start the foreclosure. But it seems that anyway (trustee / BofA) it takes a long time, so I will keep paying my dues.

SP

[filed]

...In a "No Asset Case" the Trustee files a Report of No Distribution and "abandons" all assets of the case. So, at discharge, the Trustee has effectively abandoned all property and the automatic stay is lifted.

If the Trustee filed a "notice of assets" and potential distribution, this makes it an "Asset Case"...

Dear Justbroke, Does the Trustee have a time limit by which they must file either a Report of no Distribution, or a "notice of assets" determining whether the case is a no asset case or an asset case? Perhaps 30 days after the conclusion of the 341 meeting?

[justbroke]

Dear Justbroke, Does the Trustee have a time limit by which they must file either a Report of no Distribution, or a "notice of assets" determining whether the case is a no asset case or an asset case? Perhaps 30 days after the conclusion of the 341 meeting?

I don't know. It is true that the Trustee can make an otherwise "No Asset" case become an Asset case if they "find" assets. You must remember that it is in the (Panel) Trustee's BEST interest to adjudicate the case quickly! Otherwise, they are wasting money if it's a no asset case!

I don't think there is any time period, it just needs to be done before closing. Typically, the Trustees make an asset determination pretty quickly. You should know by or at the 341 Meeting -- or shortly thereafter -- if you're an asset case or the Trustee is reviewing your assets and/or exemptions.

[GIn]

"I don't think there is any time period, it just needs to be done before closing" Soooo.....If the Trustee objected to an exemption on an asset and listed "possible assets" in his 341 report, but has done nothing else, no report of assets, no report of no distribution, and the timeline has passed for anyone to object to the discharge, is the case held open or is it automatically closed?

[justbroke]

Soooo.....If the Trustee objected to an exemption on an asset and listed "possible assets" in his 341 report, but has done nothing else, no report of assets, no report of no distribution, and the timeline has passed for anyone to object to the discharge, is the case held open or is it automatically closed?

The case is held open. However, the discharge should be entered. However, some Districts will hold the discharge until an "interim" report or a no asset distribution report is issued.

If there are actual objections to exemptions, this will prolong the closing of the case. There would need to be a hearing on the objection to claim of exemptions (unless your District uses negative noticing and you don't file an opposition to the objection to claim of exemptions). This is just procedurally how it works.

Typically, this type of objection -- for exemptions -- is handled pretty quickly unless it gets dragged out into a more complicated contested matter.

[CCsAreEvil]

Yeah, I have no idea what exactly, but for my case the trustee told me there was some creditor objecting to a claim or amount or something. My case has been open for about 2 years and 4 months now. But it's been discharged for 2 years. I think well post discharge, it's usually out of the hands of the person(s) filing BK. I'm hoping my case closes this year at least haha.. just for "closure".

[arthoralbert]

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[angles]

I don't know. It is true that the Trustee can make an otherwise "No Asset" case become an Asset case if they "find" assets. You must remember that it is in the (Panel) Trustee's BEST interest to adjudicate the case quickly! Otherwise, they are wasting money if it's a no asset case!

I don’t really understand how it costs the trustee money to keep a case open. Do they pay a monthly fee to the court for each case? I can’t see any real labor costs in it if the case just “sits” until the trustee decides what to do with it. Can you help me with understanding the costs to keep a case open?

[CCsAreEvil]

My guess would be the trustee doesn't get this "payout" until the case actually closes. So, just delayed funds?

[justbroke]

I don’t really understand how it costs the trustee money to keep a case open. Do they pay a monthly fee to the court for each case? I can’t see any real labor costs in it if the case just “sits” until the trustee decides what to do with it. Can you help me with understanding the costs to keep a case open?

No their is no direct costs, but the costs to pursue otherwise worthless assets, costs money and time. When you're as busy as most Trustees, that just doesn't compute!

[filed]

No their is no direct costs, but the costs to pursue otherwise worthless assets, costs money and time. When you're as busy as most Trustees, that just doesn't compute!

So, why would a trustee file absolutely nothing, keeping a no asset case open for now over 70 days since discharge - as is what is happening now in my case?

[justbroke]

So, why would a trustee file absolutely nothing, keeping a no asset case open for now over 70 days since discharge - as is what is happening now in my case?

Because they are busy. Otherwise, there's not reason. In some Districts they are very busy and my no asset case took 7 months to close!