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Can Trustee take Chase short sale incentive?

Phoenix, AZ |

I filed for bankruptcy which was discharged in 7/2011. I had an attorney that failed to tell me the property I included would still be my liability and only the debt was discharged. Sept 2012 I get an offer from Chase to short sale and I would receive $20k. I now have a buyer and Chase has approved the sale under the HAFA program. Title is requesting a notice of abondonment from the court because my case is still open. Do I need to disclose the $20k? Will the Trustee want the $20k? Keep in mind the bank is accepting less than half of the original loan amount and the incentive is a Chase program.

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Attorney answers 3

Posted

Trustees are taking the short sale incentives for the benefit of the creditors when a person abandons their homestead claim. Although it is probably premature to have a definite answer to this question, if you claimed a homestead exemption, I would argue that the short sale incentive is linked to your homestead.

You might as well tell the trustee about this sale, as s/he will find out about the sale from others if you don't speak up.

Hope this perspective helps!

Posted

I would contact your bankruptcy lawyer and discuss with him or her the possibility of filing a Motion for Abandonment. If the property has no equity then the trustee may be willing to abandon their interest in it. If not, then the property is not yours to sell.

Asker

Posted

The court did grant a motion for automatic stay relief to the lien holders prior to discharge in 7/2011. Does this not indicate that the court as no interest in the property?

Deborah F Bowinski

Deborah F Bowinski

Posted

Yes. That makes a big difference - you may be able to just provide that Order to the title company instead of an order of abandonment. Check with your lawyer.

Posted

If the trustee has already abandoned the property then you can argue it is no longer property of the estate nor is the incentive check.

This answer does not create an attorney client relationship between you and I. I am not your attorney unless we both sign a written contract that describes our relationship and terms of the representation. Any information provided to you here is not a substitute for the advice you need to pursue any legal matter. I advise you to retain the services of a local attorney before taking any legal action in this matter.

Asker

Posted

Is it possible for the court to grant the motion of abondonment contingent upon me turning over the incentive payment? The incentive payment is basically what Chase is giving to sale the home and is not tied to a profit from the sale of the home since it is a short sale. Couldn't this be considered a settlement in which the 180 day rule would apply?

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