Land as part of payoff

[Knucklehead]

In my Chapter 13 payback plan it includes the sale of 3 pieces of vacant land. What happens to these pieces of land at the end of my 60 mos if the land does not sale?

[Flamingo]

I am assuming you have lowered payments throughout your plan with a big payout at the end to make up for the lowered payments. That was common in years past during a Chapter 13 where one could refinance toward the end of one's plan and payoff the plan in one big chunk at tne end of the plan in return for having lowered payments on the confirmed amount due. Since you are the owner there are probably instructions in your Plan itself as to what to do (i.e., when to start the process of trying to sell the land). I would check with your attorney now in case your plan is due to end soon as to what to do to satisfy this situation and ensure there is enough time for the land to be advertised for sale to sell to meet deadlines. People in the past in lowered plan payment plans would usually have to start the refinance process at least 5 to 6 months in advance of the last scheduled payment. Contact your attorney and go over your situation completely.

[Knucklehead]

Thank you for the reply, My attorney is so difficult to get infromation from, I have asked this same question multiple times to him, the only answer I get is that it in my best interest to sale the land.
When I read my plan it just says that the land will be sold to satisfy " best interest of creditors test"

[despritfreya]

You are required to sell the land as you must pay your creditors what they would have received if you had filed a Chapter 7. This is not the "best interest of the creditors test" under 1325(b) but it is the requirement under 1325(a)(4). You are selling the land for the benefit of your creditors to meet "Chapter 7 Reconciliation".

Oh, and by the way, the land will sell. The question is, "for how much?"

[Knucklehead]

Land Sale

Thank you for the reply, I still need to know what will happen to the land? Will the trusteee sieze the land at the end of my term if it hasnt sold and sale it at auction? If the Sheriff sale nets only a fraction of its value then do I still get a discharge? This is the only option that makes sense, but not whole lot of BK laws make alot of sense.

[despritfreya]

In response to:

"I still need to know what will happen to the land? Will the trusteee sieze the land at the end of my term if it hasnt sold. . .?"

That is a very good question. If the property simply cannot be sold, even for, say $500.00, then, I suppose at the end of the Plan your attorney will file a Motion to Abandon the property and a Motion to Amend the Order Confirming. The abandonment would remove the property from the estate due to its inconsequential value and the amended Order would remove the requirement to sell the property.

I had a case once where a piece of property was to be sold. My client hired a realtor but the x-spouse would not allow the realtor access to the property. We refused to proceed with attempting to sell due to the treat of violence and turned it over to the Trustee. The Trustee either dropped the ball and forgot or decided it was not worth it. The Order Confirming required the sale of the property and the turnover of the proceeds to the Trustee. This never happened and my client got a discharge anyway. That was 3 or 4 years ago.

[Knucklehead]

Thank you for the response, I have had this land for sale at its appraised value, which if it sold, it would pay my creditors 100% of what I owe them.
I am 16 mos into my 5 yr plan, do you think the Trustee will eventually tell me to lower the price?

[LadyInTheRed]

Thank you for the response, I have had this land for sale at its appraised value, which if it sold, it would pay my creditors 100% of what I owe them.
I am 16 mos into my 5 yr plan, do you think the Trustee will eventually tell me to lower the price?

I have absolutely no experience with this, but my guess is the trustee isn't paying any attention and won't until it's time to discharge. Talk to your real estate agent about whether he/she suggests you lower the price. The appraised valued really doesn't mean much when you are selling it. The real value is what somebody is willing to pay for it.