Sale of vehicle during Chapter 13 case
Posted: Wed Mar 13, 2013 6:11 pm
Colleagues:
Chapter 13 client with confirmed Plan has two vehicles listed in his Schedules. One is fully exempt, and one is only partially exempt. Both are owed free and clear. The Chapter 13 Plan of course provides that unsecured creditors receive more than they would in the hypothetical Chapter 7 case including the non-exempt vehicle.
The client now wants to sell both vehicles to make repairs on his house. Although the Plan and K.D.'s Order Confirming Plan both provide: "Prior to any discharge, conversion or dismissal of the case, the Debtor must seek approval of the court to purchase, sell, or refinance real property", I assume a Court Order is also required to sell personal property? But is that true for everything? A car? A TV set? Clothes at a yard sale?
And the second question: if the Debtor sells the partially exempt vehicle, must he turn over the non-exempt proceeds to the Trustee? Even though he's already paying his unsecured creditors more than the liquidation value which includes that partially exempt vehicle? That doesn't seem right.
Comments will be appreciated.
Jim
James R. Selth
Certified Bankruptcy Specialist*
Weintraub & Selth, APC
11766 Wilshire Boulevard, Suite 1170
Los Angeles, California 90025
Telephone: (310) 207-1494
Facsimile: (310) 442-0660
E-Mail: jim@wsrlaw.net
*Certified by State Bar of California as Certified Legal Specialist in Bankruptcy Law
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