top Ad Widget

Collapse

Announcement

Collapse
No announcement yet.

551 means no exemption?

Collapse
X
Collapse
 
  • Page of 1
  • Filter
  • Time
  • Show
Clear All
new posts
Previous template Next
    #1

    551 means no exemption?

    "Any transfer avoided under section 522, 544, 545, 547, 548, 549, or 724(a) of this title, or any lien void under section 506(d) of this title, is preserved for the benefit of the estate but only with respect to property of the estate."

    The Trustee is trying to take my car under 544 because my Dad did not perfect his lien in 2007. But the car is worth $5000, and that is what the exemption is in Idaho.
    The trustee is saying under code 551 he sells the car for the BK creditors. Does this mean I don't get the 11-605(3) exemption on my car?
    Tags: None
    #2
    Whose name is the car in? How did you arrive at the $5,000 valuation? What valuation method does your district use?

    Is this the only vehicle you claimed an exemption for?
    Get mortgage modified: DONE! 7 months of back interest payments amortized, payment reduced over $200/mo
    (In the 'planning' stage, to file ch. 13 if/when we have to.)

    Comment

      #3
      Moon, this is the same question that is in your other threads. Please don't duplicate.

      It is the transfer that the trustee is saying illegitimate, the exemption is irrelevant.

      Comment

        #4
        HHM.

        I am not trying to duplicate, but trying to understand. Please tell where the missing piece is.

        I am told by an attorney it works like this. The transfer to Dad is avoided (eliminated), so the car is now an asset that can be taken (got this part).

        The car is exempt under 11-605(3) for $5000, then whatever the car sells for over the $5000 is used to reduced the unsecured debt. ie Sells for $6500, less $5000 exemption, then $1500 goes to the debt. (I got this part too). But if the car sells for $5000 and $5000 is exempt, then the trustee has nothing to disburse.

        Now the part I don't get...the trustee is saying that my understanding above is incorrect because under code 551, there is no exemption for the car. Therefore if the car sells for $5000, then all $5000 is used for ANY creditor, unsecured or secured. This is counter to what I am being told by this forum and a BK attorney, but maybe my attorney is unaware of 551, which is why I am back on the forum. Not as a duplication on the car, but as an inquiry to the meaning of 551.

        Can you help me, HHM?

        Comment

          #5
          From what I read in an earlier post about this car - you said its essentially your mom's car. Do you also have a car?

          If you have another car that you're claiming exempt, then the problem may be that you cannot use the exemption twice.
          Get mortgage modified: DONE! 7 months of back interest payments amortized, payment reduced over $200/mo
          (In the 'planning' stage, to file ch. 13 if/when we have to.)

          Comment

            #6
            You can also object and take it to the judge for a determination. It sounds like you've hired an attorney (good for you). Have your attorney object and argue your case in front of the judge.
            Filed Chapter 13 02/2006 - Confirmed 05/2006 - Discharged 09/2011
            I'm not an attorney. My replies are merely suggestions or observations, not legal advice. As always, consult with an attorney before making any decisions.

            Comment

              #7
              No other assets. No other car, but my name was added to the registration because the insurance company said I had to have an "insurable interest" in the vehicle. I am trying to get an attorney to help me, but am not being successful.

              I was able to present a motion for dismissal without prejudice in the hopes to start the case over and have attorney representation. My hearing is May 24th. I just don't want them to take my Mom's car in the meantime.

              The language in code 551, where it says "for the preservation of the estate", does that mean ALL the proceeds fromthe car goes to estate, or just the amount after the exemption? This is really the heart of my question.

              Thanks to all.

              Comment

                #8
                The reason why no exemption is this....

                Under the law, your father owns the car, but he did not perfect his ownership. Ownership of anything has several layers. The mere fact that he did perfect the lien doesn't mean under law he is still not considered the owner. So if the trustee avoids the transfers (551) ownership of the car does not revert back to you; hence no exemption. All lien perfection does is put other potential creditors on notice that he is the true owner of the car.

                Unfortunately, it doesn't matter if you understand it, it is just how it is.

                Comment

                  #9
                  Thank you, HHM. Thats the most reasonable explanation I've had so far.

                  Something else I've learned which is putting a new spin of life into this scenario.

                  The car as an asset can only be sold and administered to unsecured debt, of which there is none. So the sale of the vehicle is unwarranted. If the trustee does indeed initiate a lawsuit for the car, a hearing will be held and a judge will make a determination.

                  So at this point I don't need a BK attorney, but one for the preservation of the car. Hopefully I can find one who understand the many facets of BK law as well.

                  Comment

                  Previous template Next

                  bottom Ad Widget

                  Collapse
                  Working...
                  X