Exempting the Pink Panther

[justbroke]

I believe that the Trustee, in a liquidation scenario, always has the upper hand in the negotiation. I have witnessed Chapter 7 Trustees in Florida not negotiate, and just tell the debtor to go to the auction and make a bid. Of course there are likely scenarios where one could be successful with this type of Trustee.

[bornfree2]

I believe that the Trustee, in a liquidation scenario, always has the upper hand in the negotiation. I have witnessed Chapter 7 Trustees in Florida not negotiate, and just tell the debtor to go to the auction and make a bid. Of course there are likely scenarios where one could be successful with this type of Trustee.

Yeah like dropping a Rule 2004 on Debtors behind. Yikes!

But back to original post, its still unclear how Debtor is paid back exempted value of an item that goes to auction. Does trustee write a check directly to Debtor or do they go through the court as a kind of escrow?

[justbroke]

The Trustee would pay the exemption amount by check.

[bornfree2]

The Trustee would pay the exemption amount by check.

Who pays for all the litigation costs in this kind of back and forth- the trustee motions, hearings, appraisals, auction, etc. Is the amount deducted from what Debtor is owed?

[justbroke]

If the debtor is objecting, then the American-rule prevails. If the Trustee has to hire an attorney to go after property, then the bankruptcy estate pays (from the proceeds). The Trustee needs to be careful when determining the cost of liquidating something that has a partial exemption. The Trustee will weigh the cost of selling the property. They must also consider any existing liens (especially with homes).

This is why I keep saying that a smart Trustee would rather not deal with something too contingent and might ask if you just want to negotiate on paying the Trustee something.

Back to the case of the painting... in some circumstances it's best for the Chapter 7 debtor to convert to Chapter 13.

[bornfree2]

If the debtor is objecting, then the American-rule prevails.

For california, seems it can go both ways.

Back to the case of the painting... in some circumstances it's best for the Chapter 7 debtor to convert to Chapter 13.

Or self liquidate and sit on a large pile of cash whose value is undisputed - cash value = cash value. Then apply the wildcard to the pile. Then take some cash to a good lawyer.

Oh if i were a rich man...

[justbroke]

Yes, there are exceptions to the American-rule... especially when dealing with contracts. Other cases are may include malicious prosecution. You have to go in thinking that you are responsible for your own fees. This is likely why bankruptcy attorneys don't do many adversary proceedings purely on contingency (unless it's a winner winner chicken-dinner).

[despritfreya]

For an understanding of what attorney's fees get paid in bk see:

Travelers Casualty & Surety Co. of America v. Pacific Gas & Electric Co.

https://www.law.cornell.edu/supct/html/05-1429.ZS.html

and cases interpreting the decision.

Unless there is a basis in contract or statute - no fees.

Des.

[bornfree2]

For an understanding of what attorney's fees get paid in bk see:

Travelers Casualty & Surety Co. of America v. Pacific Gas & Electric Co.

https://www.law.cornell.edu/supct/html/05-1429.ZS.html

and cases interpreting the decision.

Unless there is a basis in contract or statute - no fees.

Des.

I cant conceive of a scenario where there would be a contract between Debtor and Trustee...but between Debtor and Creditors Im sure they got that in one of the statement agreements. So based on this info, seems Debtor may be more at risk for paying attorney fees if in an AP with a creditor than in dispute with Trustee.