What Happens When the Trustee Abandons Property in a Chapter 7 Bankruptcy? When you file your petition for Chapter 7 bankruptcy, except for property that is considered exempt, trustees can sell your assets to raise funds to pay your creditors. On the other hand, trustees may opt to abandon non-exempt property. The usual reason for abandonment is that selling the property would not generate enough funds to make selling it worth the effort. For example, if you have $3,000 exempt equity in your car that has a market value of $10,000 but you owe the lender $12,000. There will not even be enough money to pay the lender after a sale. The trustee will then abandon the car. What happens next depends on your unique circumstances. What Happens to Abandoned Property? If you own the abandoned property free and clear, you get to keep it. This is generally the case…
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When you file for bankruptcy protection, either Chapter 7 or Chapter 13, your Kansas City bankruptcy lawyer will guide you along to a fresh start. Creditors also have someone protecting their interests – the bankruptcy trustee. The bankruptcy trustee is closely involved with every bankruptcy filing from start to finish, and he or she will scrutinize your petition and schedules. The bankruptcy trustee’s role will vary depending on whether you file for Chapter 7 or Chapter 13 protection. Chapter 7 and Chapter 13 Trustees The United States Trustee (UST) appoints the bankruptcy trustee, and while the UST is a government employee, the bankruptcy trustee is not. In fact, bankruptcy trustees are usually attorneys or accountants. As mentioned above, the bankruptcy trustee is not on your side. He or she looks out for your creditors’ interests throughout the bankruptcy process. In a Chapter 7, the trustee plays a more limited role…
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