Did you know that the bankruptcy trustee is in charge of all assets in your bankruptcy case? But that doesn’t mean he sells everything the bankruptcy petitioner owns.
What Property is the Bankruptcy Trustee Actually In Charge Of?
“All assets” refers to the estate or all legal or equitable interests of the petitioner in property as of the commencement of the bankruptcy case as well as any community property of the petitioner or the petitioner’s spouse (of the petitioner’s ex-spouse if there is not division of community assets available).
Does the Bankruptcy Trustee Sell All the Petitioner’s Assets During Bankruptcy?
A Chapter 7 trustee can sell assets if there is value in doing so that would benefit the petitioner’s creditors. Doing so is, in fact, the trustee’s duty. The trustee is in place to “collect and reduce to money the property of the estate for which such trustee serves…..” 11 U.S.C. § 704(a)(1). The trustee accomplishes this by selling property under 11 U.S.C. § 363(b). However, bankruptcy code also defines certain exemptions. If property qualifies as one of the designated bankruptcy exemptions (up to a certain value), it is exempt from sale by the trustee during the bankruptcy.
When Does the Bankruptcy Trustee Choose to Sell the Petitioner’s Property?
Not all assets are sold by the bankruptcy trustee. Exemptions, as discussed previously, are not eligible for sale. Additionally, before the trustee decides to sell property, they consider the property’s value less the costs of selling the property, and less any encumbrances (judgment liens, mortgages, etc.) less any exemptions. If the bankruptcy trustee determines that the nonexempt equity in a certain property is significant enough to warrant a sale, they will start the process of selling. For example, when in reference to the petitioner’s house, the trustee will generally begin the sale process by filing an application to employ a real estate broker.
If you have questions about filing Tennessee or Georgia bankruptcy and you want to discuss debt reaffirmation, get in touch with an experienced bankruptcy attorney. Don’t hesitate to call Kenneth C. Rannick P.C., Tennessee, and Georgia bankruptcy attorney. We help good people through bad times.