Process of Chapter 7 trustee selling a vehicle

Asked almost 2 years ago - Los Angeles, CA

What is the process of Chapter 7 Trustee selling a vehicle that is partially exempt ? Does the car get taken away from the person filing chapter 7 until it is sold ?

Attorney answers (3)

  1. 2

    Lawyers agree

    Answered . It depends. Do you want to keep the vehicle? Or do you want to give it up? If you want to keep the vehicle, you can buy back the non-exempt equity and make payments to the trustee. In Los Angeles, the Chapter 7 trustee usually allows you to pay over a 6 to 12 month period. Otherwise, if you don't want to keep the car, the trustee will give you instructions on what to do with the vehicle - and it will involve surrendering possession of the vehicle so that it can be sold. How much equity is unprotected? Have you spoken to the trustee about the non-exempt equity? Have you had your Meeting of Creditors yet? If there isn't much non-exempt equity, the trustee might just pass on it.

  2. 1

    Lawyer agrees

    Answered . If you are looking for more of a procedural answer than what was already given I'm afraid I can not help because I have never encountered a situation in which there was enough equity in a car to make it worthwhile for a trustee to seize the property and sell it. As my college stated, the trustee would take control of the asset and is obligated to get a fair price for the vehicle. The individual filling would get back the exempted amount and the excess would be split among the creditors. If you have not yet consulted a lawyer it may be advisable to do so. There may be a way to exempt your car.

  3. Answered . If the Trustee is going to sell the property they would take possession of it and advertise it for sale. You would receive your exempt portion from the proceeds derived from the sale. Must be a nice car. Here in Alabama I have yet to see a Trustee seize and sell a vehicle and we have the worst exemptions in the Country. Talk to your attorney to see if they believe the Trustee will actually want to sell your vehicle. The sale would have to result in a substantial distribution to unsecured creditors after paying your exempt amount and paying the costs of sale. Good Luck.

Related Topics

Chapter 7 bankruptcy

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.

Stephen M. Dunne

What is Chapter 7 Bankruptcy?

Chapter 7 Bankruptcy wipes out ("discharges") your debts. Chapter 7 is the bankruptcy provision most frequently used by individuals. It involves the complete liquidation of a debtor's... more


A trustee is the person or legal entity who administers a trust according to the wishes of the person who set it up (as specified in the trust agreement).

Can't find what you're looking for? Ask a Lawyer

Get free answers from experienced attorneys.


Ask now

37,391 answers this week

3,933 attorneys answering

Ask a Lawyer

Get answers from top-rated lawyers.

  • It's FREE
  • It's easy
  • It's anonymous

37,391 answers this week

3,933 attorneys answering