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cfortunato, Attorney
Category: Bankruptcy Law
Satisfied Customers: 8023
Experience:  Bankruptcy professor.
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How long can the bankruptcy trustee sit on assets Does he

Resolved Question:

How long can the bankruptcy trustee sit on assets? Does he have a time requirement to settle the bankr and close everything out. Question is concerning land my sister and I own. If one of us declares bankr the trustee could possibly take possesion of one half of the land which is a deed of trust that the buyer has not paid us for and will not since he is in federal prison now. The trustee would have to get more than the property is currently worth to pay of the other half owner. So the above question arises as to how long would the trustee wait or would he realize it is really worthless.
Submitted: 6 years ago.
Category: Bankruptcy Law
Expert:  cfortunato replied 6 years ago.

Hi Customer,

The property is valued by the trustee as of the date the Bankruptcy is filed. If the property is worthless at the time of filing, the trustee must surrender it - he cannot wait for it to increase in value beyond the usual 6 months it takes to close a case.

cfortunato and other Bankruptcy Law Specialists are ready to help you
Customer: replied 6 years ago.
The asset is a deed of trust in default. Would the bankr trustee get an actual appraisal done of the real estate or go by the face value of the deed of trust? Would the trustee actually go to NC from KY to do a reposession/foreclosure to get any possible equity. Now keep in mind the current property value is much less than the deed of trust since values plummeted after the developers arrest and conviction. We have not had the resources to foreclose either. If the trustee did try to foreclose he woud have to get enough to pay off me or my sister first before he got any money.
Expert:  cfortunato replied 6 years ago.
The trustee would use the actual value of the property, not the amount owed on the deed of trust. But are you saying that you your deed of trust is the only encumbrance on this property? Do you owe anything to the builder or to any other entity?
Customer: replied 6 years ago.
We own the deed of trust. He has not paid us. We do not owe him anything.
Expert:  cfortunato replied 6 years ago.
After considerable thought, I must admit that I do not know the answer, so I will opt out of this question so that someone else can help your further.