Selling Stuff

[Ihatebk]

My 341 is scheduled for May 19 and last time for creditor to file claim is on July 18. My house is being foreclosed on June 10 and I am thinking about selling everything (no big items) at garage sales from now until I get kicked out of the house. I need a place to live so I hoping to raise about $3500 in these garage sales and buy a travel trailer to live in. I plan on buying the trailer on June 10 and like I said my 341 is on May 19.

Do you see anything I am doing wrong here? I need a place to live and don't have much, so if I could get a $3000 travel trailer to live in that would be nice.

[newbie2]

Your house won't be foreclosed upon June 10th, unless your lender filed for a relief from stay and had it granted. Normally if the approximately $3500 worth of goods that you're planning to sell is already exempted in your filing you shouldn't have a problem. However, I'm a cautious sort and would advise for you to wait until you are discharged from the bankruptcy (discharged with a notice of "no asset" from the trustee). As I said, unless your lender received a relief from stay, there won't be a foreclosure on June 10th. Even if they did that, you probably still have some time by your states law before you have to vacate the premises.

[Ihatebk]

Well the bank did file and get a motion of stay on my chapter 13, but I have since dropped the chapter 13 and refiled as a chapter 7. They have submitted a new motion to dismiss from the stay. It has not been approved yet. Not sure how long I can stay in my house after foreclosure. I am not even sure weather or not the bank has to file a new foreclosure notice on my new bk.

[btbeme]

The Ch 7 will issue a new Stay. Chances are you have several months to stay in the house. Selling assets while the Trustee has you by the short hairs is a great way to get your case tossed. No sales - not even you used chewing gum collection - until your Ch 7 is discharged. That is, unless you wish to be made a poster child.

[Dorsey]

I had precisely this issue come up just a few days ago. I was interested in selling a few exempt items as my Chapter 7 case was pending. I called the Trustee assigned to the case and was told in very clear terms to NOT liquidate (i.e. convert property into cash) until AT LEAST the 341 meeting of creditors. Although the Trustee did not say that approval to liquidate items would be granted after the 341 meeting, I assumed from the nature of the conversation that he would entertain a request to liquidate after the 341 meeting but before discharge...although this remains a little unclear. The bottom line: no liquidation of property until you have the Trustee's permission. My understanding of the bankruptcy law is that your property (all of it) is legally owned by the Trustee during the bankruptcy process and while you can use the cash in your wallet or checking account to pay for necessary expenses like food and shelter, you cannot sell anything. The law is obviously a little strange in this regard because while you can use cash from the estate, you cannot convert property to cash, to use for expenses. My assumption is that the sale of assets during bankruptcy raises issues of whether you are getting market rates for the goods or, because of the pressure of the bankruptcy, you are selling the items for significantly less they are worth as you try to scrape together anything you can.

So, in the end you need to act as if the property you are using (i.e. cash, car, house) are being borrowed. They should be used sparingly and gently so as to not reduce their value and they, of course, should not be sold...just as you wouldn't sell the lawn mower you borrowed for you neighbor.

[AngelinaCatHub]

IF you convert items of no real value like in a garage sale, to cash, you may become an asset case. I would not do anything at all till after 341, then ask your lawyer, unless pro se then you can ask the Trustee directly. In reality as stated above, once you file, ALL your things become the legal property of the Trustee. That is why he is called a Trustee. It would be wise to make it past 60 days, only two months after 341 and you may dispose of all you own then. Find your camper and put a deposit down with the idea that you will pay later. OR, wait, with this economy, there will be plenty of campers as people bail out the luxury things. 'Hub

[tobee43]

really, you need to figure out the actual cost of those items and what type of lose you are taking. if you purchased an item new for $200 used it twice and sold it for $20...it's not a gain of any sort, but it does convert into cash, and as long as you are honest and upfront and don't make 35,000 at your garage sale......i'm sure you should be fine.

we sold everything...including our clothes to make money for our move, the trustee didn't' have a word to say. however, as hub points out...it could be questionable...really only if you have a trustee that is like that. but from what i have seen, really doubtful unless you are an asset case to begin with and the trustee sends someone out to see you items.

i know this is a worrisome time. but sometimes it's best just to do what you need to do...including sell your things to eat etc. and there's not a thing not a one, that can't be straighten out one way or another.

otherwise, many people find themselves in a position during this terrible financial time to sell what they have just to eat.

[Dorsey]

Just remember that the Trustee owns the property now and will until the discharge date. It would be unwise to do anything with the Trustee's permission. Call the Trustee (if your pro se) or have your attorney call the Trustee and explain that you need to liquidate some exempt property because you need to eat or pay rent. The Trustee may be reluctant because creditors are able to object to (and theoretically win) a motion to make some of your assets non-exempt. If that happens and it turns out you sold the asset, you are now exposed to criminal fraud charges.

[Pandora]

not to mention trustee may want the trailer you plan on purchasing... Listen to the others and sell nothing until you are discharged. You should be fine staying in the house until that time.

[tobee43]

yes, i want to clarify...we ONLY sold things for our move and by the time we were sitting in our 341 we were homeless, and staying with friends.

one would hope a trustee would have a heart...but they don't. we still were not questioned, but our situation was that we were NOT still in our home at the time. so each and every situation lends to it's own unique facts.

best of luck!!