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Case Discharged 07/2021, Trustee abandoned property, Case still not closed.

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    #1

    Case Discharged 07/2021, Trustee abandoned property, Case still not closed.

    Hello everyone, I hope someone in here can help me out because I'm starting to feel really hopeless.

    We filed Ch 7, asset case (trustee wanted our tax return), in 02/21 and the case was discharged in 07/21 and trustee abandoned our property. My husband is starting a new job, out of state, in June. We decided to sell our house here and title said that we cannot close escrow with our ch 7 case still open. It's been over a year! We checked pacer and trustee had asked for her payment but haven't filed asset distribution. Our closing date is in 19 days and I'm just about ready to give up at this point and we will never be able to start our lives over because of this bankruptcy

    Please help.
    Tags: None
    #2
    Did you file with an attorney? If you did, then the attorney is the place to go. They'll contact the Trustee and/or check to see if the final report was filed.

    If you filed without an attorney, Pro Se / In Pro Per, then you'll need to contact the Trustee. Find out when the Trustee will file the final report.

    In either case, Pro Se or with attorney, have you filed your 2021 tax return? Was there a refund? How much was to go to the Trustee? Have you sent it to the Trustee? When? It can take 30-90 days for a case to be closed once the Trustee has the payment / money as they must distribute the amount and wait for any returned checks, then file their final report.
    Chapter 7 (No Asset/Non-Consumer) Filed (Pro Se) 7/08 (converted from Chapter 13 - 2/10)
    Status: (Auto) Discharged and Closed! 5/10
    Visit My BKForum Blog: justbroke's Blog

    Any advice provided is not legal advice, but simply the musings of a fellow bankrupt.

    Comment

      #3
      Hi, yes, we have an attorney. All the assets (tax return monies and whatever that was left in our bank account) was already sent to the trustee and fully paid. The last payment was made October 2021. Tax Return was $10k. The latest thing the trustee filed was "Trustee Certification of Services Rendered" on 03/14/22. We did everything she asked by the books. I don't know what's taking her so long to close our case. We asked our attorney if he can ask her and his response was "I can only ask her to close it but it's really up to her."

      It's very frustrating.

      Comment

        #4
        The title company cannot close on the sale of an asset of the bk estate without a court order. There are at least three ways to deal with this:

        1. Push to get the case closed now. This can only happen if the Trustee has completed his/her job and has filed a final report.

        2. Is the equity you will get from the sale within your allowed exemption? If "yes", discuss with your attorney and the title company asking the Trustee to issue a Notice of Abandonment. Once abandoned, the property is no longer property of the estate and the sale should close.

        3. If there is equity over the allowed exemption or an abandonment is not sufficient to the title company, ask the Trustee to allow you to file a Motion for the sale of the property to which the Trustee can join in. The Trustee will take the excess over the exemption (if any) for the benefit of your creditors.

        Outside of getting the case closed now, it will take a bit of time to remove the property from the estate through the Notice of Abandonment process or getting a court order allowing the sale. I would think a couple of additional weeks will get you there.

        You needed to have previously discussed this with your attorney so that you had things in place before agreeing on a closing date. Having not done this ahead of time, you need to work with your attorney now. You will most likely have to move your closing but, in the end, you should be fine as long as the buyers are willing to wait a couple of weeks.

        Call your attorney today and discuss the options mentioned above. This is not really a big deal although it may cost you a bit of money for the attorney to prepare, file, notice out a sale motion and attend a hearing on the motion.

        As a side note, in any of my asset Chapter 7 cases, I warn my clients not to even think about selling anything until after the case is closed. I also tell them that there is no time-frame for the closing as the filing of the final report is up to the Trustee. I recall only two instances where selling became an issue. In the first I filed a Motion to sell with the Trustee joining the Motion. In the second, I got the Trustee to abandon the property. I liked the second better as it did not cost my client anything.

        Des.
        • Likes 1

        Comment

          #5
          Property was abandoned by Trustee 07/2021. And that's the reason why we had an ok from our attorney to sell.

          Comment

            #6
            Originally posted by arphan View Post
            Property was abandoned by Trustee 07/2021. And that's the reason why we had an ok from our attorney to sell.
            You have a specific abandonment on the house?

            What title company are you using?

            If you have access to First American Title I would recommend moving your escrow to FAT. In Arizona, I always recommend FAT and, to date, have not had a problem with it.

            Des.

            Comment

              #7
              No specific abandonment. We're using Chicago Title. And how do we switch title companies? Thank so much for all your help. I really appreciate it so much!!

              Comment

                #8
                Originally posted by arphan View Post
                No specific abandonment.!
                If you do not have a specific order/notice that abandons the home, the property has not been abandoned. It is still property of the estate. Even FAT will not close without a court order authorizing the sale of property of the estate.

                Des.

                Comment

                  #9
                  I misunderstood you, so sorry. Yes, we got a Notice of Abandonment re (address of our house) filed by the Trustee on 07/30/2021.

                  Comment

                    #10
                    Originally posted by arphan View Post
                    Yes, we got a Notice of Abandonment re (address of our house) filed by the Trustee on 07/30/2021.
                    Ok. Now, look up First American Title to see if there is an office near you. Call any escrow officer that is listed and begin to discuss with him/her your situation. If he/she does not have an answer, ask that he/she immediately talk to the legal department. Be prepared to email to him/her a copy of the Notice of Abandonment. This entire process should take just a few days if FAT is not backlogged with work.

                    Forgot to mention - make sure you keep your real estate agent in the loop since FAT will have to work with him/her as well. Until you have a response from FAT, leave the current escrow as is. If the escrow is moved, FAT will handle the details with a proper instruction from your side.

                    Des.

                    Comment

                      #11
                      Thank you so much! Will do this first thing in the morning! God bless!

                      Comment

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