QUESTION
Is it legal to abandon certain property while in bankruptcy?
Asked on Aug 20th, 2012 on Bankruptcy - Michigan
More details to this question:
Proposed abandonement of certain property in a bankruptcy. What does abandonement by the trustee in the bankruptcy and notice to creditors mean? The property mortgage is $470,000 while the actual value is $270,000. Is the trustee saying that there is no equity to be salvaged for the creditors?
9 ANSWERS
Daniel James Wilson
Yes.
Answered on May 22nd, 2013 at 10:15 PM
When you file for bankruptcy all of your assets including your car, house, and personal property such as clothing, furniture, and household good, etc are placed in a trust. The trust is a fictional legal device and certain powers over your property are given to the trustee. The trustee is ordering the trust to abandon the property back to you. So just like you said, because there is not equity in the house there is no reason to muck up his/her paperwork with it. Th automatic stay continues in place and it shouldn't mean much to you in terms of what to expect in the process.
Answered on Aug 24th, 2012 at 11:31 PM
Bankruptcy Attorney serving Washington, DC
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Law Offices of Diann C. Moseley
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Yes, the trustee is giving notice to all parties that the bankrupt estate has no legal interest in the property. This is done when there is no equity in the property.
Answered on Aug 24th, 2012 at 11:30 PM
Criminal Law Attorney serving Fremont, CA
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Steven J. Alpers, A Professional Corporation
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Yes. It sounds like the property is underwater, maybe you can do a short sale.
Answered on Aug 24th, 2012 at 11:30 PM
Bankruptcy Attorney serving Livonia, MI
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Charles J. Schneider, P.C.
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Yes, sounds like it.
Answered on Aug 24th, 2012 at 11:29 PM
Appellate Attorney serving Grosse Pointe Farms, MI
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Musilli Brennan Associates, PLLC
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Yes. You need an attorney to answer your questions if you are in the process of bankruptcy.
Answered on Aug 24th, 2012 at 11:27 PM
Bankruptcy Decision Attorney serving San Diego, CA
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Law Office of Daniel G. Shay
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When The Trustee abandons property it is good for the Debtor. It means The Trustee is not going to sell it for the benefit of the creditors, usually because it is exempt or has no equity.
Answered on Aug 24th, 2012 at 11:26 PM
Bankruptcy Law Attorney serving Livingston, NJ
Partner at
Law Office of Stuart M. Nachbar, P.C.
2 Awards
You should be asking this of your counsel. When a Trustee abandons his/her interest, it means that they believe they can not sell it for a benefit to the Creditor body. Therefore, they abandon their interest and you move on. You will no longer be liable personally for the Mortgage on the Property unless you reaffirm it.
Answered on Aug 24th, 2012 at 11:26 PM
When something is abandoned by the trustee that means they are not seeking to liquidate that asset to pay off creditors.
Answered on Aug 24th, 2012 at 11:26 PM