Question Do We Need A Motion To Sell?

[ToughTimes]

We're post discharge on a Chapter 7, but case not closed as trustee has a painting to sell.

House in question is a ride-through (and was our primary residence).

Attorney's prior advice was that we were free to market the house, but would need a motion to sell to actually sell the house.

We will not realize any money from selling the house, and, in fact, will have to bring somewhere between $1000 and $2000 to the table to retire the loan fully. Sell price is $2000 less than value declared on BK filing. Property is exempt in the BK & shows full administered on the Trustee's initial report. The offer does do the slight of hand thing where the buyer has offered a higher price in return for $5000 of their cost becoming "our" contribution toward their closing costs.

We're somewhere between two and three weeks to closing escrow, though the contract clearly states "subject to court approval".

It is not at all like our attorney not to have returned my call. It is consistent with the local culture that he might do that if what he was trying to tell me was "sell the house and keep your mouth shut about it".

While it is the case that it is very clear to DH and I that we are again and again penalized for being honest, it is nonetheless the case that we are committed to following the law and/or doing the right thing as nearly as we are able to figure out what that is, penalties or not.

Letter of the law: Do we need a motion to sell?

And, anyone have any idea or experience as to how long it should take to submit the motion and get a ruling from the judge back?

Thanks in advance!

[keepmine]

I don't know the answer to your question but, why are you selling something that was discharged in bk and you're actually bringing a chaeck to the settlement?
Walk away and let the lender deal with selling.

[forgotten]

I second that... why would you throw away $2000 to "sell" your house?

[OhioFiler]

We're post discharge on a Chapter 7, but case not closed as trustee has a painting to sell.

House in question is a ride-through (and was our primary residence).

Attorney's prior advice was that we were free to market the house, but would need a motion to sell to actually sell the house.

We will not realize any money from selling the house, and, in fact, will have to bring somewhere between $1000 and $2000 to the table to retire the loan fully. Sell price is $2000 less than value declared on BK filing. Property is exempt in the BK & shows full administered on the Trustee's initial report. The offer does do the slight of hand thing where the buyer has offered a higher price in return for $5000 of their cost becoming "our" contribution toward their closing costs.

We're somewhere between two and three weeks to closing escrow, though the contract clearly states "subject to court approval".

It is not at all like our attorney not to have returned my call. It is consistent with the local culture that he might do that if what he was trying to tell me was "sell the house and keep your mouth shut about it".

While it is the case that it is very clear to DH and I that we are again and again penalized for being honest, it is nonetheless the case that we are committed to following the law and/or doing the right thing as nearly as we are able to figure out what that is, penalties or not.

Letter of the law: Do we need a motion to sell?

And, anyone have any idea or experience as to how long it should take to submit the motion and get a ruling from the judge back?

Thanks in advance!

I'd be rather careful with this scheme. You are basically agreeing to contribute $5,000 to the new buyer at closing. The trustee may want that $5,000 if you try to sell the property before you are closed.

[ToughTimes]

OhioFiler, that is one of my concerns. The practice is very, very common, but it did occur to me that it might look like potential revenue to the trustee.

In answer to the question, "Why would we bother?": The property is 2500+ miles from where we are now and is a hard fixer, which is to say it will require maintenance once the weather warms up. First bee removal, then mowing three acres regularly, then wasps as the season moves along. So far no one has mentioned the squirrel we know lives in the attic during wintertime.

We really want a fresh start, and not being responsible for distant real estate is part of that. Originally we put the house on the market after discharge in hopes we might be able to negotiate a deed-in-lieu with the lender (who requires 90 days on MLS prior to being willing to negotiate a deed-in-lieu). We really, really did not expect to find a buyer. Even our real estate agent is astonished that anyone would buy it.

So my question remains: I know certainly that we'd need a motion to sell prior to discharge, but I don't know if we need one post discharge but prior to case closing. Anyone?

Thanks in advance!

[forgotten]

In answer to the question, "Why would we bother?": The property is 2500+ miles from where we are now and is a hard fixer, which is to say it will require maintenance once the weather warms up. First bee removal, then mowing three acres regularly, then wasps as the season moves along. So far no one has mentioned the squirrel we know lives in the attic during wintertime.

But... you were discharged... you just ignore the property and let the bank deal with it. Its not your concern anymore. You don't owe anything that way... just pretend like its not there.

But yes... you probably would need a motion to sell the property as its part of the bankruptcy estate until the case is closed... But like I said, you can just ignore it and let the bank deal with it and save your $2000.

[ToughTimes]

Love Our Attorney!

I read many threads with questions and often wonder, "How did that turn out?" Thus I'm posting our status on this question.

I find in PACER that our attorney has apparently made a phone call to the local trustee who has filed a proposal to abandon the real estate property we have in escrow.

The wording states, "Please take notice that unless an objection or request for hearing on this proposed abandonment is filed, the Property will be deemed abandoned according to law without further order of the Court or action by the Trustee." Response must be filed before we expect to close escrow--two weeks.

This is faster and easier than a motion to sell as it does not require the judge to formally order it.

It also neatly avoids any potential grief over the $5000 to go to the sellers in escrow.

I wanted to be sure I chose an attorney who had very cordial relations with the local trustee. Our result in this instance is why.

We did a ride through on this property. My understanding, both from our attorney and from what I've read on this forum, is that we would incur a foreclosure eventually after having stopped paying the mortgage. Foreclosure in Ohio takes some while. (Attorney says 18 months, internet says 270 days.) Yes, we're not responsible for the debt. Still, we'd like to avoid having foreclosures on our public record if at all possible.

We also find it stressful when the township trustee calls wanting the three acres of grass mowed. My understanding is that we can be cited if we don't comply (which we can't afford to, now that we can't mow it ourselves), and the citation would be post-BK, so we'd have to find a way to pay it. I think if they arrange to have it done, though, that lien attaches to the property and so would not accrue to us. Still, we're on a bit of a campaign to eliminate stressors.

I'm willing to enter into further discussion as to why we're selling instead of ignoring the property, but I think it's time any further discussion be in PM as we'd be getting into topics not directly related to BK.

[helpmeout]

OhioFiler, that is one of my concerns. The practice is very, very common, but it did occur to me that it might look like potential revenue to the trustee.

In answer to the question, "Why would we bother?": The property is 2500+ miles from where we are now and is a hard fixer, which is to say it will require maintenance once the weather warms up. First bee removal, then mowing three acres regularly, then wasps as the season moves along. So far no one has mentioned the squirrel we know lives in the attic during wintertime.

So? You are not responsible for that. If you have a buyer and the bank wants to argue over $2K (which they legally can't as they can no longer attempt to collect on the debt at all) let them foreclose.

Personally, I would just let the bank foreclose and let them deal with the headache of selling the house.

[helpmeout]

It also neatly avoids any potential grief over the $5000 to go to the sellers in escrow.

No, it does not. If you were to win the lottery within 6 months of being discharged/closed (not sure which, but your attorney would know), the Trustee can come after what you won.

I would definitely discuss that $5K with your attorney because I suspect that the Trustee will go after that money if the sale is within the 6 month timeframe.

[OhioFiler]

I read many threads with questions and often wonder, "How did that turn out?" Thus I'm posting our status on this question.

I find in PACER that our attorney has apparently made a phone call to the local trustee who has filed a proposal to abandon the real estate property we have in escrow.

The wording states, "Please take notice that unless an objection or request for hearing on this proposed abandonment is filed, the Property will be deemed abandoned according to law without further order of the Court or action by the Trustee." Response must be filed before we expect to close escrow--two weeks.

This is faster and easier than a motion to sell as it does not require the judge to formally order it.

It also neatly avoids any potential grief over the $5000 to go to the sellers in escrow.

I wanted to be sure I chose an attorney who had very cordial relations with the local trustee. Our result in this instance is why.

We did a ride through on this property. My understanding, both from our attorney and from what I've read on this forum, is that we would incur a foreclosure eventually after having stopped paying the mortgage. Foreclosure in Ohio takes some while. (Attorney says 18 months, internet says 270 days.) Yes, we're not responsible for the debt. Still, we'd like to avoid having foreclosures on our public record if at all possible.

We also find it stressful when the township trustee calls wanting the three acres of grass mowed. My understanding is that we can be cited if we don't comply (which we can't afford to, now that we can't mow it ourselves), and the citation would be post-BK, so we'd have to find a way to pay it. I think if they arrange to have it done, though, that lien attaches to the property and so would not accrue to us. Still, we're on a bit of a campaign to eliminate stressors.

I'm willing to enter into further discussion as to why we're selling instead of ignoring the property, but I think it's time any further discussion be in PM as we'd be getting into topics not directly related to BK.

Once the property is abandoned don't you lose your right to sell it and "contribute" the $5,000 to the buyer? I realize this doesn't affect you but the buyer will be screwed, correct?

[ToughTimes]

helpmeout,

Our attorney has a full copy of the sales contract, as he requested prior to arranging permission to sell. The money to buyer is clearly indicated on it.

This is a really, really common practice in real estate and this is money that will never pass through my hands. What is commonly done is the buyer offers an amount over what they'd be willing to pay for the property. The overage amount is the amount they need to cover their closing costs. It comes out of the equity in the property.

In our case, our exemption is far greater than the entire equity in the property.

If the sale is accomplished, then that money goes to the buyer. I never see it, and the sale cannot be consummated without it being credited against the buyer's closing costs. The trustee, I'm sure, can easily see that there simply will not be a sale otherwise. The trustee seemed pretty bright to me.

The trustee has filed a motion to abandon. He doesn't want the house. Once he has abandoned an asset, we are free to do as we wish with it. If I did make five grand selling it after the trustee abandoning it, it'd be my five grand, just as five grand in wages post filing would be mine and not his.

However, where I was concerned is if there had been a motion to sell. In that case we would have been converting an exempt asset to cash, and we did not have the ability to exempt additional cash. Since the asset is abandoned, that's not an issue.

I also am free to win the lottery as long as I did not purchase the ticket on or before the day I filed bankruptcy, though I'm pretty sure the trustee would have been very interested to know if I'd won it prior to our 341, and honor would have required me mention having won in more than passing to our attorney if we'd won it prior to discharge. We're post discharge, though, so I guess maybe we should buy a ticket.

The code is very clear that the only assets required to be acquired into the bankruptcy estate past the day of filing are:
(5) Any interest in property that would have been property of the estate if such interest had been an interest of the debtor on the date of the filing of the petition, and that the debtor acquires or becomes entitled to acquire within 180 days after such date--
aaaaa(A) by bequest, devise, or inheritance;

aaaaaaaaaadecree; or

aaaaa(C) as a beneficiary of a life insurance policy or of a death benefit plan.

That said, I do believe it is the case that we are required to let the trustee know of any substantial change in our circumstances between filing and the 341 meeting at that meeting. However, it seems to me that all the trustee can do with such information is to require a case be converted or dismissed. I don't think assets can be added to the estate other than what is clearly stated in the code. (I'm not an attorney and I haven't asked ours, as we can't claim the good fortune to have had a substantial change in circumstance. Anyone with better knowledge care to comment?)

OhioFiler, when the trustee "abandons" an asset, s/he is saying s/he has no further interest in it whatsoever; that s/he doesn't believe there's any way for it to serve to pay creditors. At that time the asset once again is the debtor's to do with as s/he chooses. Presuming there are no objections prior to the given date, we choose to sell it. That the property had not been formally abandoned prior (though it does show fully administered on the trustee's report as it was fully exempted) is why we asked our attorney to arrange permission for us to sell it. (We really didn't expect a buyer. Still can't believe it & I'd love to meet these people.)

[OhioFiler]

OhioFiler, when the trustee "abandons" an asset, s/he is saying s/he has no further interest in it whatsoever; that s/he doesn't believe there's any way for it to serve to pay creditors. At that time the asset once again is the debtor's to do with as s/he chooses. Presuming there are no objections prior to the given date, we choose to sell it. That the property had not been formally abandoned prior (though it does show fully administered on the trustee's report as it was fully exempted) is why we asked our attorney to arrange permission for us to sell it. (We really didn't expect a buyer. Still can't believe it & I'd love to meet these people.)

My bad! Best of luck to you two in California! It's a comfy 3 degrees here in lovely northern Ohio!