Have ? regarding asset prior to close

[4Abetterlife]

Hello,
We filed an asset case ch7 with a home exemption. The sixty day period after 341 is coming up soon. Our attorney seemed to indicate that the Trustee may keep the case open for quite some time depending on... All of our creditors are CC companies. He had suggested that we might want to offer the trustee $5K for our two non exempt used cars. Other misc assets may not be worth the trouble for the trustee. My question is regarding our desire to put our house on the market, after discharge most likely, but prior to close. As we have equity in our home and used the exemption, if we sell our home can the trustee come after our proceeds from the sale of the house? Also, would it be recommended to make that offer to the trustee of $5K to buy back our vehicles and hope that he would then close our case. Any suggestion and advise would be appreciated. Thanks

[msm859]

Tough call because this sounds like extortion. The Trustee gets 25% on the first $5,000 he collects. However, you have to make a business decision.

[despritfreya]

As it relates to the residence. . . If there is no value in the residence over your allowed exemption, ask your Attorney to request that the Trustee issue a Notice of Abandonment. Or, ask your attorney to file a Motion to Abandon. Once the property is abandoned you will have no issues as it relates to selling and the proceeds.

As it relates to purchasing the non exempt value of assets. . . You can make the offer on the vehicles. The Trustee will either 1) accept the offer and not auction the vehicles; 2) reject the offer; 3) use the offer as an opening bid at the auction. Depends upon the Trustee.

Des.

[4Abetterlife]

thanks msm.
Des, are you saying that I could ask for a NoA for just the house? Also if we sell the house prior to close or NoA, can they go after any proceeds/cash?

[despritfreya]

thanks msm.
Des, are you saying that I could ask for a NoA for just the house? Also if we sell the house prior to close or NoA, can they go after any proceeds/cash?

Yes, an individual asset can be abandoned as being of either “inconsequential value” or “too burdensome” for the estate. As to the proceeds, it depends on how the homestead exemption reads. My jurisdiction exempts proceeds for a specific period of time. Theoretically, if the proceeds are not dissipated within that time and the Trustee had not abandoned the property, the Trustee could claim a right to the $$$.

Des.

[tcreegan]

Hi 4Abetterlife,

Something to consider: the trustee has to pay to move the cars to the auction, pay the 10% auctioneer cost, and get whatever whoever is bidding thinks is a good deal. Costs of selling is at least 20%. Offer the car value less 20% and see if they bite. They have no mess, no bother, and a set price. Its a negotiation, start low and go up from there and have a set max value you won't go above. Use the selling cost and price risk as bargaining points.

Just some thoughts from an old salesman....

Tom in Colo

[05mag]

Are you guys saying if they sell the house before closing it is no longer exempt and the trustee can come after the equity they have in the house? That just doesn't seem right, if it is exempt to begin with it should stay exempt.

[despritfreya]

Are you guys saying if they sell the house before closing it is no longer exempt and the trustee can come after the equity they have in the house? That just doesn't seem right, if it is exempt to begin with it should stay exempt.

No. Only questioning the language of the homestead exemption. Does it trace through to the proceeds and, if so, how long can one hold onto the proceeds before the proceeds lose protection? In Arizona, for example, proceeds are protected for 18 months. If you still have the proceeds after 18 months and your bk is not closed the Trustee can take the cash. (In re White I believe is the case for this.

[4Abetterlife]

My quick searches on MA homestead does not yield any info regarding period of time proceeds might be protected. In fact it seems that the proceeds from the sale may not at all be protected. Anyone have a definitive on this?