QUESTION
Trustee is planning to sell the house after converting from chap 13 to 7, but I just can't understand why he wants to.
Asked on Jul 12th, 2022 on Bankruptcy - North Carolina
More details to this question:
So basically the bankruptcy was converted from 13 to 7 and now the trustee wants to sell it. There is no real equity but the current market makes it appear that way. Purchased 5yrs ago but if the owner walks away with the exemption amount that is more than what will be left over after paying off the mortgage. So basically payoff mortgage, mortgage holder gets $35k and there will be about $18k to divvy up between trustee, real estate agent and creditors. It seems silly because in the current market it's cheaper to stay in the home than trying to move. Looking for insight.
1 ANSWER
4 Awards
$18,000 is a significant distribution to creditors. The Tustee's duty under the Bankruptcy Code is to represent the creditors interests. It's less expensive for you to stay in the home than it is for you to pay rent, but that is not the Trustee's duty. This is something that you or your attorney should have anticipated prior to converting to Chapter 7. Any increase in value of the house which cannot be exempted goes to the creditors in North Carolina bankruptcy courts. It may not be too late to unwind this and convert back to Chapter 13 if you want to keep the house, but you would need to be able to make up the Chapter 13 payments you missed.
Answered on Jul 13th, 2022 at 5:18 AM
This is general legal advice only. You do not have an attorney-client relationship with Attorney Lynn E. Coleman without a signed retainer agreement and payment of any applicable fees.