Hi all, new here with a question on buying back assets..

[gemsnroses00]

Hi, I am new to this forum and would like to introduce myself/situation! We filed BR (chapter 7) in December 2012 and received a discharge a few weeks ago, the case remains open until the funds from our tax refund are distributed. We also have one more ‘hiccup’, I have mineral interests (inherited in 2001) the trustee has now made an offer for us to buy back from the bankruptcy estate. My counter offer was to pay half in cash with the balance remaining to be split into 6 payments. I just received notice the trustee filed a Motion for Order Authorizing Sale. My attorney said if there are no objections the judge should issue an order approving the sale in a month or so. How smoothly do these sales go, and why would a creditor object if they are getting a % of the sale? My attorney has been awesome, but he tends to give very vague answers, the ’shouldn’t been an issue’ type of answers actually have been! I would cut off my leg to keep this in my family if I could, it hurts my heart more than my pockets as it doesn’t have much money coming in and has never been a big payoff for me. I was originally was told that it was unlikely the trustee would be interested in it because it can be a “administrative nightmare”, so that eased my mind a bit even though I knew it couldn’t be protected. Has anyone been through a situation like this or know how it plays out? Our attorney hasn’t given me a lot of advice on what to do, only passing along the information from the trustee. I didn’t even know I could counter offer until I looked into it, but anyways, I have searched all over the internet and I haven’t found much, so any info is appreciated, I just want to know how this can play out. I have been on a BK diet, lost a few pounds over this part and have had a few emotional breakdowns! We gave back the house and the van, was fine with it, but man this feels like I'm losing a family member or something, I am WAY TOO emotionally attached to it for some reason, ugh. Also, if this case stays open for a while, which I was told at least 6 more months, can our future 2013 refund get taken as well? Thanks!!!

[justbroke]

First, let's dispatch with the easy stuff. Any anticipated 2013 tax is not affected by this bankruptcy filing. Your bankruptcy "estate" was created on the day you filed in 2012. Nothing after that date can become property of the estate with 3 limited exceptions (inheritance, property by divorce, life insurance proceeds) within 180 days of filing.

I don't think your attorney is being flippant or anything like that. Typically, Trustees do not like to dabble in areas that could cost them money (out of their own pocket) with nothing gained. Remember, the (Panel) Trustee is just a regular attorney who is charged with liquidating your Estate. The fact that the Trustee filed the motion to sell, does not mean that the Trustee would not accept your offer; it means that they are just lining their ducks up. The question is really how much could the Trustee expect from the sale. I do not have any idea about pricing "mineral" rights and the Trustee would have been wise to hire an appraiser with such skills.

I know it's difficult, but please do not attach yourself to property! Easier said than done. True. I am asking you to step back and not think about the property (mineral rights) being in the family and its sentimental value. You really need to seek what the REAL value of the property is and BALANCE that with your fresh start and where you want to be/go. I do not know any residuals or leases that you have on the mineral rights, but unless they are profitable and not merely speculative, you may need to rethink the attachment. This should be purely a business decision.

[gemsnroses00]

Thank you for your reply, this makes sense and that's good to know! The trustee was the one who determined the fair market value by looking at 3 yrs worth of tax returns and offered to sell it back at a set price, I accepted, but to pay half in cash with the rest in cash payments while the case is still open. It sounds win win to me, but maybe it's too good to be true, but I'm going to give it my best shot and say well I tried my best to keep it!

[stray]

Justbroke's advice is awesome. I can tell you what happened in my particular situation. The trustee gave us an amount to buy back our assets (it was only $1100). We paid in full according to his deadline of a week. After he received our check, he filed a "Notice of Intent to Sell". There was about 20 days that one of the creditors could outbid us if they wanted. It didn't happen (this was for 2 old vehicles).

I get the family history thing. My mother's side has some mineral rights and it dates back to my great grandfather. But there are also records showing that my grandfather sold some of them off without the family knowing. So, it's probably only meaningful to us because of the history. But in my grandfather's time, it was just an asset to liquidate. Good luck to you.

[gemsnroses00]

Oh geez, creditors can out bid you? How often does this happen (and why would a creditor object anyways btw), and if I'm making payments, can it be sold to someone else? See, this is good to know, I don't like surprises and I would rather know now then get all freaked out later. Apparently, If I don't ask, my atty isn't going to tell me..

[despritfreya]

Look at the Application to Sell. I will bet it covers the terms and conditions of the offer you have put forth. The Trustee has a duty to the creditors to notice out the offer made for an estate asset and the Judge has the duty to ask if there are any "higher and better" offers. My guess is that the Motion/Application was sent out on a 21 day "negative notice" telling creditors that they have 21 days to voice an objection. Your attny is correct by telling you that typically these types of Motions are not objected to. He cannot guarantee an outcome but, in my experience, rarely, if ever, is there a problem - unless there is some overly aggressive creditor that is "out to get you" just out of spite - like an ex spouse or mad relative or mad ex partner.

Des.

[justbroke]

Oh geez, creditors can out bid you? How often does this happen (and why would a creditor object anyways btw), and if I'm making payments, can it be sold to someone else? See, this is good to know, I don't like surprises and I would rather know now then get all freaked out later. Apparently, If I don't ask, my atty isn't going to tell me..

This does not happen often. Why would a creditor purchase an asset anyhow? They would, first, need to come up with the money. Then, they'd need to either manage the asset (after obtaining ownership) or sell the asset and "hope" that it would make them money. I can not think of ONE "retail" creditor that would purchase an asset, of which they don't hold any liens or have any interests, from the Trustee. (As Des writes, above, the Motion to Sell probably has language indicating that you, the debtor, are purchasing the asset.)

If you are making payments, it would not be sold since you would be the purchaser. If you did not make all the payments, the Trustee may go back to the court to force you to pay the remainder, or get permission to sell the asset free and clear.

Your attorney isn't going to speculate and tell you about all the different possibilities. There is no sense in even worrying about them. Unless there is something highly imperative to a debtor's fresh start, an attorney is not going to travel down the rabbit hole on every possible scenario of every Trustee for every asset. In the end, it does not matter or change the outcome.

When your bankruptcy estate is created, all property belongs to that estate unless you exempt it (period). Short of that, all a bankruptcy attorney should need to tell you is that non-exempt property may be sold by the Trustee. The Trustee "may" offer to sell it back to you after negotiating a specific amount and payment period. The Trustee may seek court permission to sell it free and clear. Any asset that is not exempt, is subject to liquidation. Everything else is speculation.

I think that when we attach ourselves to property, we will hear only what we want to hear or at least formulate a scenario that satisfies our attachment. For example, you wrote in the first post that the attorney indicated that it is "unlikely" that the Trustee would want the asset. Unlikely is not the same as saying the Trustee would "never want" the asset. When it comes to unprotected assets in a Chapter 7 Liquidation, it is always likely that the Trustee could demand payment or seek court permission to sell... however unlikely it occurs. You just happened to have an (apparently) income generating asset for which the Trustee could assign a "value" and attempt to sell.

I would not worry about creditors objecting. You should just hope that the Trustee accepts your offer and that the Court gives the Trustee permission to sell it to you.

[gemsnroses00]

Thanks Des and Justbroke! Everything you guys said makes sense. My attny doesn't want to ruffle my feathers, as it's a very sensitive subject to me, I see that now. My attny has said many times he has a good working relationship with the trustee, (even called her a 'friend') so I hope that in return helps me. If she wasn't interested in taking my offer, would she have bothered to file the motion? Also, does anyone know where I can read more about, Motion for Order Authorizing Sale of Property of the Estate. Free and Clear of Liens and how it works? I don't have an angry ex or anything like that, just typical creditors like Chase, Discover, HOA and so on. I will let you guys know how this all plays out if you would like to know, but I'm sure it will be a while! Thanks again!

[justbroke]

Given what you just wrote about your attorney, I do not think that you have any issues. There is nothing to really look up on a Motion to Sell Free and Clear or an Authorization to Sell. It just allows the Trustee to sell the property and places all interested parties on notice of such intent to sell.

[gemsnroses00]

I just got the the document about the details of the sale, it looks like the sales price is listed to be paid back in payments just like I offer to pay! The hearing is set for April 30th, hopefully its a go and I can move forward and get past this part. Is there anything else I would need to know or do at this point other than just wait it out?

[justbroke]

I just got the the document about the details of the sale, it looks like the sales price is listed to be paid back in payments just like I offer to pay! The hearing is set for April 30th, hopefully its a go and I can move forward and get past this part. Is there anything else I would need to know or do at this point other than just wait it out?

If the Trustee wrote the Motion, then the Trustee is accepting your offer. The Judge generally will rubber stamp that type of Motion to Sell. You are good to go.

[gemsnroses00]

Thanks Justbroke! I feel good about this now. If I receive checks during this waiting time, I guess I'm suppose to turn them over? I was never told and really didn't want to ask, the only thing that my attorney said for sure was not to spend the tax refund, which we made sure not to do!

[justbroke]

Thanks Justbroke! I feel good about this now. If I receive checks during this waiting time, I guess I'm suppose to turn them over? I was never told and really didn't want to ask, the only thing that my attorney said for sure was not to spend the tax refund, which we made sure not to do!

If you receive checks based on your contracts, you keep them. You are the owner and will continue to be the owner once the Trustee moves to approve the sale. I would just hold on to the checks until the sale is approved. Then, I suppose you could use the proceeds from those checks to help pay the installment agreement with the Trustee (to purchase the property back from the Estate).

Double check with your attorney to be sure. It is an interesting question!

[despritfreya]

Thanks Justbroke! I feel good about this now. If I receive checks during this waiting time, I guess I'm suppose to turn them over? I was never told and really didn't want to ask, the only thing that my attorney said for sure was not to spend the tax refund, which we made sure not to do!

You hold them pending approval of the sale of the asset to you. Do not cash them. They are profits derived from non-exempt estate property. Until the sale is approved they belong to the Trustee. Once approved they belong to you. And, yes, do tell your attny.

Des.