I've filed a Chapter 7 case with an Attorney last year, and got discharged in December of last year. The case is still open because I made a buyback agreement with the Trustee to pay off the non-exempt equity for the car in the monthly installments. Well, I have paid my last installment at the beginning of this month, but some 20+ days later, the case is still opened. I know Trustees are pretty busy folks, but I am curious how much longer he may take to distribute payments and close the case, as I am being a bit nervous about having the case open and my house further appreciating in value and possibly exceeding the homestead exemption in several months. I've used the $75,000 exemption from section 704.730 and can still absorb the house appreciating for another $30,000, but that's about it.
The appreciation in value should not affect your chapter 7 exemption rights. The value of the house is determined as of the date of the commencement of the case (for chapter 11 cases, however, the value is as of the date of the confirmation hearing). The trustee is under no specific deadline to close the case. You can certainly contact the trustee's office but, if that office is like most, they understand that the do not have to, and they will not, commit to a deadline for their administration of the case. Still, they may be willing and able to give you an estimate.
The value of your house would typically be determined as of the date you filed not how long the case stays open unless you have some other issue happening with that in your case. The trustee can take as long as he/she needs to distribute the money. It is hard for anyone to say how long it will take the trustee to do his/her final report and distribute the funds. The only one that would know the answer to that would be the trustee. You may want to give the Trustee's office a call and ask them.
In addition to the excellent answer by Attorney Kuhn, you call discuss with your attorney filing a motion to abandon. But the trustee either has or will be causing a deadline for proof of claims to be filed by creditors. Then he reviews those claims to see if there should be any objections to them. All of that takes time. You already received your discharge probably and thus your debts will be discharged. However, if you have any non dischargeable tax debt, or non dischargeable criminal or traffic fines or student loans or child support debt, check now to make sure a proof of claim was filed by such creditor so that they receive part of the monies paid out to creditors on non-dischargeable type debts. You can file a claim on their behalf also but must follow the rules on that. Good luck in your new debt free period of your life now. I hope all our attorney answers assist you too! PS IT costs money to file a motion to abandon in both filing fee and attorney fees!
Once a trustee is satisfied that all viable asset liquidations have been completed, provided the estate tax return (if any) is not rejected and there is no litigation over the allowance of filed claims against the estate, it should take about 4-6 months to close the case. If there is still $30k exempt equity in the house at this juncture, you should file a motion to compel abandonment. Even if you filed the case without an attorney, it is not too late to hire one for that limited purpose, probably for about $500.
This is the first time that I have ever had to say this but
ALL THE PRIOR ANSWERS ARE WRONG!!!!
Until the trustee abandons the house any appreciation can be taken by the Trustee. I know this for a fact and have seen it done here in Sacramento. The trustee, even if they are quick cannot complete the case in less than 4-6 months. The typical is 9-12 months. The trustees are dragging their feet in any open cases where there is a home that may gain enough equity beyond what is protectable.
I would note that your HOME is NOT PROTECTED. In California what is protected is $75,000 of equity. If the trustee can sell the home, pay off the deed of trust and cost of sale then pay you $75,000 and have money for creditors the trustee WILL sell it.
I have taught bankruptcy seminars that included this issue and I have been to seminars where this issue has been discussed. The Judges and trustees all know this. In fact, at the Sacramento Valley Bankruptcy Seminar in February one of the Judges on their "roundtable" was complaining because he had to approve the sale of a debtor's home because the attorney committed MALPRACTICE by not filing a motion to compel the trustee to abandon the home.
The best way to protect your home is to IMMEDIATELY file a MOTION TO COMPEL ABANDONMENT as to the house BEFORE the value exceeds what you can protect. Your attorney should have known that this needed to be done. Sadly, there is a lot of attorneys that do not seem to know this.
Bankruptcy is a legal way for people or businesses who are no longer capable of paying back their bills to clear these debts and start over.
Chapter 7 bankruptcy is a form of bankruptcy where your debts are canceled, but some of your assets are sold to pay off part of your debt.
Written by attorney Josh Johnson
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