How long can a asset non-consumer case stay open

[jst4f]

How long can a trustee keep an asset non-consumer case open before discharge and then closing. As an example: In my case there are real estate assets that currently are valued less than the mortgage. Can the trustee hold the BK open until the price for real estate increases so there is excess money for the creditors and the trustee? (Assume the banks don't intervene.) In general can a trustee hold open the BK until this recession turns around and the assets are worth more? Thank you

[freeatlast09]

Sounds like our situation was/is similar to yours. Our Trustee held our case open for two years trying to short sell our house. They received an offer, but BofA wanted our post petition financial information (tax returns, bank statements, pay stubs, etc...) in order to proceed with the sale. Our refusal is the only thing that made the Trustee and the real estate agent give up and the case is finally closed.

Is the Trustee currently trying to sell your house? Do you have other assets?

In answer to your question, I think a Trustee could hold a case open for a long time waiting for an asset to increase in value. (They do have a lot of power) They are supposed to liquidate any available assets in a timely manner - not play games holding the case open. Of course, that doesn't mean your Trustee won't play such games, but you also have the right to file a Motion to Compel Abandonment on the house since it currently is of inconsequential value and burdensome on the Estate .

[rustymich]

What a nightmare that sounds like!!!!!

[justbroke]

How long can a trustee keep an asset non-consumer case open before discharge and then closing. As an example: In my case there are real estate assets that currently are valued less than the mortgage. Can the trustee hold the BK open until the price for real estate increases so there is excess money for the creditors and the trustee? (Assume the banks don't intervene.) In general can a trustee hold open the BK until this recession turns around and the assets are worth more? Thank you

In general, no Trustee in their "right" mind would hold a bankruptcy case open, hoping that underwater real estate will appreciate in value. (There are some greedy Trustee's out there, but most are "smart".) The Trustee can hold a case open so long as s/he is administering assets for distribution. No "smart" Trustee wants to deal with a case that's really a no-asset case because they don't make any money at all! They only make "real" money when they find assets. Thus, it's counter-intuitive for them to speculate on what they can get from underwater properties. Don't get me wrong... some have tried this game, and it just doesn't work.

The only thing you need to worry about as a debtor, is obtaining your discharge. The Trustee cannot delay the discharge just to administer assets.

While Trustees do have powers under the bankruptcy laws... they can't abuse them! Almost all decisions are really made by the Judge, and as indicated above, you could easily file a Motion to Abandon and force the Trustee to appear before the Judge and explain themselves. Remember, Trustees in Chapter 7 cases are appointed attorneys. Many of them practice bankruptcy law for debtors (clients) as well!

[angles]

We are also in the same boat and even though I have asked our attorney this same question, he provides me with a vague answer. His basic answer is not to be concerned about it. We have unprotected property that is worth less then what we owe and have been making payments on it. I am also concerned that as our case stays open the property might look more attractive to the trustee as the loan value goes down with our continued payments. If that happens, can we ask for those payments back?

Just for some background...we filed in July (asset, non consumer chap 7), discharged in February (after some prompting by us) and are still open as far as we know. We have an unprotected property that has equity in it and expect the Trustee to sell it. Now that we have been discharged the bank is starting the foreclosure processes (letters requesting payment, no hard date yet). To us it seems irresponsible for the trustee not to quickly liquidate it and claim the money for the creditors.

freeatlast09 - I like your idea of filing Motion to Compel Abandonment just to get things rolling but we are a little reserved and don’t want to upset the Trustee so that he makes our life more difficult. Like the original post, we want to get this done and move on. The protected and non-protected assets have been identified so there is no reason for the trustee not to move forward. Very frustrating to say the least.

Anyone have experience with filing a motion for abandonment?

[freeatlast09]

I am also concerned that as our case stays open the property might look more attractive to the trustee as the loan value goes down with our continued payments. If that happens, can we ask for those payments back?

IMHO I don't think that making payments on an asset would be called increasing in value. It seems to me that if an asset increased in value due to market conditions that might cause a Trustee to take a second look. Say you have a piece of art that's worth $500, but then the artist dies and gains a cult following and suddenly that art might be worth $5,000. A Trustee may be able to make some sort of argument for that - I really don't know.

In the 'payments' scenario, anyone with an exempt car (with a loan) would be at risk by making payments and thus increasing the value of the car. I can't see how the Trustee could take that by holding a case open.

[jst4f]

We have not filed yet, but planning very hard trying to see how bad or how good it could be. We are working with a lawyer as well. Our house and many of the rental properties are under water unfortunately not all the rental are so I expect we will be an asset case. However, based on some of the stories on this forum I wonder if those properties that are just underwater when you consider the selling fees might temp a trustee to play the market. I understand that the trustee has responsibilities for the property, including liability, so they are running a risk. I am looking for stories from others on the forum on their experiences. Thanks

Sounds like our situation was/is similar to yours. Our Trustee held our case open for two years trying to short sell our house. They received an offer, but BofA wanted our post petition financial information (tax returns, bank statements, pay stubs, etc...) in order to proceed with the sale. Our refusal is the only thing that made the Trustee and the real estate agent give up and the case is finally closed.

Is the Trustee currently trying to sell your house? Do you have other assets?

In answer to your question, I think a Trustee could hold a case open for a long time waiting for an asset to increase in value. (They do have a lot of power) They are supposed to liquidate any available assets in a timely manner - not play games holding the case open. Of course, that doesn't mean your Trustee won't play such games, but you also have the right to file a Motion to Compel Abandonment on the house since it currently is of inconsequential value and burdensome on the Estate .