Asset case - now what? (losing house)

[KevFinnerty]

Finally a development in my case, but as usual, it makes no sense to me.

As per above I was expecting some kind of motion to be filed regarding the Trustee obtaining the services of a realtor to sell the house etc, but instead I see in pacer that a motion has been filed in pacer that my debts are being "discharged".

I am totally confused now.

Last month a motion declared me an asset case (therefore allowing claims to proceed and Trustee to try to sell assets etc) but there has been basically nothing since then.

Pacer still shows me as an asset case, and they had given the creditors until April to file their proof of claims as per the previous motion. But now they are saying my debts are "discharged"??

Doesn't that mean that the unsecured claims are now moot, therefore there is no reason for the Trustee to take/try to sell the house to pay anything to the creditors?? There was nothing filed saying that he looked into selling the house, or that he decided to abandon the asset or anything whatsoever like that. Instead my debts are just "discharged"??? I don't understand.

I guess this puts me back into foreclosure city, letting the mortgage co. proceed with their foreclosure?? Sigh.

[ValleYum]

Nope. All is well (so far!) You are being discharged not closed. Big difference.

All the debt is being discharged on schedule **except** for what made you an asset case (the house).

The creditors still have until the April deadline to file a claim and then your trustee will proceed from there by hiring a realtor, etc. Remember, too, that Des mentioned this isn't a quick process.

None of the above happens over night.

I am pretty darn sure you have no worries just because you see that you are being discharged in Pacer.

Take care and I wish you good luck with all of this. Keep us posted!

[keepsmiling]

Kev, sorry to hijack your thread, and wishing you a change in your luck.
Since this addresses one of my issues- possible equity in my house- I was hoping the experts could chime in here with their thoughts.
I owe 104 on 1st, 111 on Heloc=215. We are married using Federal. How much would my house have to be appraised at for the trustee to want it or ask me to buy out? I'd have to break into the 401K to do a buyout- how does anyone have enough cash to do this in a 7 anyway?
Zillow has me at around 314 but we know it's not worth that as it needs a TON of repair including a new roof.

[KevFinnerty]

Whew. Thanks so much for your post.

So the discharge in my case is a good thing then. I was taking it to mean that my unsecured creditors were not entitled to anything, therefore the rest of the bk process was over, house not even going to be TRIED to be sold.....but no, does this mean just that the creditors cannot "go after me" and instead have to go through the trustee/court and abide by what happens through his actions, what assets he recovers and get what they can from THAT, but they can't expect payment from me anymore (which was a possibility if my case was dismissed or something)???

Also - I was wondering when the trustee would start the house sale process - are you saying that he won't even BEGIN that part until AFTER April, after all the creditor claims are in? I figured he would be starting independent of that but its just been so weird not hearing anything, I didn't know what to think.

[KevFinnerty]

Kev, sorry to hijack your thread, and wishing you a change in your luck.....

No problem hijacking or whatever - we're (kind of) all in this miserable state together! Hope you get a decent answer, & good luck to you.

[ValleYum]

Whew. Thanks so much for your post.

So the discharge in my case is a good thing then. I was taking it to mean that my unsecured creditors were not entitled to anything, therefore the rest of the bk process was over, house not even going to be TRIED to be sold.....but no, does this mean just that the creditors cannot "go after me" and instead have to go through the trustee/court and abide by what happens through his actions, what assets he recovers and get what they can from THAT, but they can't expect payment from me anymore (which was a possibility if my case was dismissed or something)???

Also - I was wondering when the trustee would start the house sale process - are you saying that he won't even BEGIN that part until AFTER April, after all the creditor claims are in? I figured he would be starting independent of that but its just been so weird not hearing anything, I didn't know what to think.

Discharge is a very good thing - it takes you off the hook. Claims by your unsecured creditors mean that they are signing up to get what the trustee can give - and anything is definitely better than the $0 they would have gotten if you had remained "No Asset". Nobody can come after you for any debt that was discharged in bankruptcy.

I truly don't know about the time frame for the Trustee hiring the Realtor, etc. I may have used the words "and then" and just needed to say "and". So sorry.

Hopefully Des, HHM, Tom or one of the other gurus can chime in soon and really reassure you.

[despritfreya]

I owe 104 on 1st, 111 on Heloc=215. We are married using Federal. How much would my house have to be appraised at for the trustee to want it or ask me to buy out? Zillow has me at around 314 but we know it's not worth that as it needs a TON of repair including a new roof.

The first thing the Trustee should do is a comparative market analysis to see what the property is worth. Zillow is not a good indicator in this type of a situation. If the CMA comes back showing the type of equity you indicate then he should do an appraisal to take into consideration the actual condition of the home. The problem is that, as it sits right now, the estate has no money, so he would have to come out of pocket for the appraisal. He might just list it at the CMA value and wait to see what happens.

There is no black letter rule as to how much over your exemption needs to be recoverable to the Trustee. In my district if the amount that can be recovered is greater than $1,000.00, the Trustees will usually go after it.

As to a buy-out, that becomes a problem, especially when dealing with the dollars you are mentioning. You can make an offer (using the 401K is valid) but that offer may be nothing more than an "opening bid" in a public type sale. The Trustee has a duty to maximize the recovery for the creditors. Simply accepting an offer from you without marketing the property to attempt to obtain the "highest and best offer", is a violation of the Trustee's fiduciary duty to creditors. Regardless, a Trustee cannot sell an exempt asset unless the sales price produces a sufficient amount to pay the allowed exemption. In your case, and if I am reading the Federal exemptions correctly, you and your spouse get the first $43,250.00 after payment of both mortgages and, if the sale won't give that to you, then no sale.

Des.

[helpmeout]

Duplicate post.

[helpmeout]

Attempt to delete duplicate post from what I posted previously, forum does not allow delete. Which I think it should.

[keepsmiling]

The first thing the Trustee should do is a comparative market analysis to see what the property is worth. Zillow is not a good indicator in this type of a situation. If the CMA comes back showing the type of equity you indicate then he should do an appraisal to take into consideration the actual condition of the home. The problem is that, as it sits right now, the estate has no money, so he would have to come out of pocket for the appraisal. He might just list it at the CMA value and wait to see what happens.

There is no black letter rule as to how much over your exemption needs to be recoverable to the Trustee. In my district if the amount that can be recovered is greater than $1,000.00, the Trustees will usually go after it.

As to a buy-out, that becomes a problem, especially when dealing with the dollars you are mentioning. You can make an offer (using the 401K is valid) but that offer may be nothing more than an "opening bid" in a public type sale. The Trustee has a duty to maximize the recovery for the creditors. Simply accepting an offer from you without marketing the property to attempt to obtain the "highest and best offer", is a violation of the Trustee's fiduciary duty to creditors. Regardless, a Trustee cannot sell an exempt asset unless the sales price produces a sufficient amount to pay the allowed exemption. In your case, and if I am reading the Federal exemptions correctly, you and your spouse get the first $43,250.00 after payment of both mortgages and, if the sale won't give that to you, then no sale.

Des.

Thanks Des. Perhaps the mods want to move this to its own thread?
Ack, I was hoping you'd tell me it was a slam dunk.
I thought I understood from your previous post that the expenses of selling (around 10%) and some cash for the trustee also needed to be included.
I have a CMA from a broker for 235-250. My concern is that it will be debated given the Zillow high ball estimate and the possibility of spring bringing in higher prices. I should mention that the only other asset I have is about a little over 10K in bonds (that I am debating cashing in to buy a car since I am driving a 93 beater with 150K miles).
I presume the house is marketed while we are still living in it? Obviously we wouldn't be motivated sellers and not likely to leave the house all spiffy -- we aren't very spiffy to begin with-- so does that enter into the picture at all? And who pays the mortgage while we play the waiting game?

[CoBelle]

Des,Kevin isn't the only one you helped by your advise.
So what should have happened in my case was that the trustee should have sold the property, given me my homestead, taken her fees and used the rest to pay creditors.
But she didn't ....after talking to one of the creditors whom I think paid her off to let it go.

Good luck to you Kevin...thinking that maybe you'll have a while longer to live in your home...but don't do anything to tick the trustee off because he can decide that he wants you out of the home to sell it.

[KevFinnerty]

Good luck to you Kevin...thinking that maybe you'll have a while longer to live in your home...but don't do anything to tick the trustee off because he can decide that he wants you out of the home to sell it.

Uggh. I didn't know that. Not that there is anything I would do to tick him off. I have zero contact with him. I thought I stayed until/if it's sold & changes hands, that he can't just throw me out at any time because he wants to sell it/whatever.