QUESTION
What is the process for a Ch 7 Motion to Compel Trustee to abandon interest in a property?
Asked on Jan 29th, 2013 on Bankruptcy - Florida
More details to this question:
I am in escrow on a home. The seller filed for Ch 7 bankruptcy right after accepting our offer. She filed a motion to compel the trustee to abandon interest in the property because the equity is the same amount as her homestead exemption. The trustee initially objected, but then withdrew the objection. There was a hearing today, but the notes just say "off calendar". I am told that we need a judge's order in order to be able to sell. Is this the last step? How long does this usually take? Are there any actions that I (or the seller) can take to expedite the judge's order? I have already lost my loan approval and am having to start from scratch, and I have no idea when this will be resolved and I can finally close escrow.
5 ANSWERS
You file the motion, send out appropriate notices and then (assuming the Trustee does not Want to abandon) go in front of the judge to argue the basis and facts of your motion. Seek counsel to help you is my sincerest advice.
Answered on Jan 31st, 2013 at 2:24 PM
Bankruptcy Attorney serving Seattle, WA
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Henry & DeGraaff, PS
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You should speak with the seller's attorney to find out what the current status is. From what you are describing, it sounds like the seller and the trustee have come to some sort of agreement.
Answered on Jan 31st, 2013 at 2:24 PM
Complex Litigation Attorney serving Costa Mesa, CA
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Thomas Vogele & Associates, APC
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Unfortunately, it appears you are at the mercy of the bankruptcy court's calendar. "Off calendar" can mean many things, from the trustee needs more time to the judge's calendar was too full on that day. As the buyer and non-debtor, you have no legal stake in the motion, although it is very important to you. Speak with the debtor and their lawyer about the motion and see if the delay is going to be a short one. Then try to resurrect your loan approval. The Court must enter an order on the motion to abandon first, then you can complete your purchase.
Answered on Jan 31st, 2013 at 2:23 PM
Bankruptcy Attorney serving Charleston, SC
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Davis Law Firm
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The selling of real property by a debtor in a bankruptcy is complicated by many different issues. As a purchaser, you should hire an attorney to help you handle both the steps necessary to get the property so that the debtor can sell the property and handle the subsequent sale. You do not want just any attorney to handle the closing unless that attorney is closely working with an experienced bankruptcy attorney. It is possible that no order will even be required from the Bankruptcy Court since this is a Chapter 7 case. It is clear that the persons advising you do not understand bankruptcy and the differences between Chapter 7 and Chapter 13. Even if it costs you a few dollars extra, you should make sure that have competent advice on what steps are needed to protect your interest.
Answered on Jan 31st, 2013 at 2:22 PM
Bankruptcy Attorney serving Plantation, FL
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Moffa & Breuer, PLLC
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You may be caught in legal limbo. If the Debtor listed the property as exempt on its schedules and there is no pending objection to the claimed exemptions, then 30 days after the conclusion of the Meeting of Creditors, the Debtor is legally entitled to the amount of equity in the property and no Order will be entered because this happens by operation of law and there is no order entered. This is how you might end up in legal limbo if the Title company wants an Order.
Answered on Jan 31st, 2013 at 2:21 PM