Question about how the BK trustee decides whether to sell your house.

[ColoradoBell]

My house has a contingency contract on it for $600,000.
There is a Receiver involved and he estimates 10% closing costs.($540k)
My share is 60%. ($324k)
My homestead exemption might be $90k. (or I might only get 1/2)
My secured debt (HELOC and judgment liens) might be $ 275k. (this is in dispute).

The most recent judgment liens would be avoided because of the above numbers (A $5k, a 9k, a 7k, and a 27k: In Colorado if you can't pay off a lien in full the whole lien is avoided.)

There would be nada left for the unsecured creditors but I do have @ $10k in Disney stock.

The HELOC is currently up to date, but no payments are being made on the judgment liens as they never had any payment schedule.

So will the BK trustee just abandon the property because there is nothing there from my share to pay off unsecured debt?
Or will the BK trustee look to the contract to see why the house is selling so far below appraised value? Well I realize we can't predict what a BK trustee would do: what I mean is, is either option open to the bk trustee or is there a set policy?

[BobMango]

Form my experience it's really up to the trustee. During my 341 there was a fellow there that owned property that included camping sites and a few golf holes from the resort on the next property. How he came to own it was really complicated (improperly recorded deed, etc) but the trustee was all about taking the property, selling it to the resort next door, taking his cut, paying off creditors and giving the filer a few $100K back.

Not much help I know, but in this case the trustee seemed to want to make it work for all concerned. (All including the trustee, lest we think he was doing it out of the goodness of his heart. )

[AngelinaCat]

With all of the baggage that is attached to your home in the form of various liens, loans and such, it is a good bet that your trustee will just 'throw up his/her hands' and just wash themselves clean of the mess, and abandon it.

A trustee wants to liquidate a property as simply and cleanly as possible, so that he /she can sell it and give the proceeds to your creditors. Your property has so many loans and liens that MUST be cleared first, before the trustee can sell it, that it is unlikely that your trustee would realize any kind of profit, much less his/her fee, so it is likely that your property will be 'abandoned'.

Please do NOT count on that above paragraph as 'gospel'. I have no idea what your particular district and trustees require; I am just relating what our, 'Hub and my, experience was, plus what I have been reading of other posters' experiences.

Good luck to you!

[HHM]

If the trustee cannot get any money for your unsecured creditors, he is not going to bother.

[justbroke]

Yep... most Trustee's like quick and easy things. Once in a blue moon you may find a Trustee who wants to challenge an assignment or a transfer of a note because there are obvious recording and chain of custody issues. Remember, the Trustee gets only $60 even if they spend 1 year and $20K trying to undo a transfer or avoid a lien.

Hopefully, your Trustee will not be in the mood and will quickly abandon all hope of squeezing money out of the property.

[ColoradoBell]

This should make me happy....but because I know the house is being sold at a very low price to a friend of my X's and is worth much more.... there is a concern if it gets back to the divorce judge who will find a way to give X even my homestead exemption.

But I guess now, the question will be if I can get rid of the unsecured debt owed to my X by filing, and that will be in dispute and involve litigation I know.

Your opinions have been valuable tho in educating me as to how the trustee might 'see' the situation. That helps!

So who pays if the trustee decides to file an objection? I've been reading BK case law in my state and some of those objections must have cost a lot of lawyer fees.

[justbroke]

So who pays if the trustee decides to file an objection? I've been reading BK case law in my state and some of those objections must have cost a lot of lawyer fees.

Objection the debtor's exemption(s)? It would be the debtor? This is done as a contested matter and usually just 2 or three hearings is all that is necessary. It is nothing like an Adversary Proceeding which is a full blown trial. You should be able to defend exemption objections with less than 4 hours of your attorney's time.