Central District Consumer Bankruptcy Attorney's Association

Thanks Dennis. I should have provided a few more facts. The facts
cut both ways.
Alas the trustee asked the debtors to move out, pay rent or the
mortgage at the risk of a surcharge of the homestead exemption if
the home did not realize enough to pay off all the general unsecured
creditors. Debtors just could not afford to pay or move and
believed in good faith the home would sell for significantly higher
amount than current proposed sale, which would have yielded 100% to
general unsecured creditors. The Debtor's otherwise have been
cooperating with trustee in effort to sell. In fact the debtors
have been the ones actively trying to find overbidders. They have
not heard from the trustee's listing broker since served with notice
of the proposed sale.
Mark Jessee

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>
>
> I have never had a trustee try to surcharge the
homestead if the trustee did not ask the debtor to
move out.
Your argument is the debtor kept the house up, showed
the house and got the trustee the best price (if you
need an expert, almost any broker will testify they
get higher prices for homes which are occupied.
Vacant homes are sterile and do not get high offers).
If the trustee wanted your client out, you would have
gotten them out. It is bad faith to have the debtor
participate in the marketing and then charge them for
the participation.
You cannot use this argument if the debtor was an
impediment to the marketing.
dennis
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Chapter 7 trustee filed a motion to sell debtor client's real
property free and clear of debtor's homestead and asking for offset
by amount of reasonable rental value of property. Debtor was short
on income to pay mortgage or rent, but anticipated 100% payout.
However now proposed sale price will not be 100% because proposed
sale is approximately $90,000 less than trustee's original list
price (Obviously hoping for overbids)
In previous cases of mine other trustees have not asked for an
offset from homstead exemption where less than 100% payout to
general unsecured creditors. Maybe my clients were just lucky.
While I don't think trustee's position here is per se unreasonable,
I am trying to perform my due dilegence for my clients in searching
for any opposition grounds. However, I have not had success finding
authority that seems specifically on point for this issue. Anyone
know of any authority on point?
Mark Jessee

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