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[COLOR=black]Here is my story in a nutshell: We put up our house for sale in 2006. In 2008, we got divorced. At the end of 2010, my ex-husband filed for Chapter 7 bankruptcy. He did NOT reaffirm the house. I had to stop making payments as I could not afford to live there without his share of the mortgage payment. Another reason was that for each buyer I did have on the house, the mortgage company refused to look at the offer because I was current on my house payments. Crazy, but true. As soon as I stopped making payments, they were more interested in looking at the potential offers I had on the house. [/COLOR]
[COLOR=black]The house is close to getting short sale approval. I am now finding out that the trustee on the bankruptcy has not signed off on the papers. She is waiting to see what happens in "foreclosure" to see if she can make any money for his creditors (and herself). She is basically forcing me to foreclose on my house unless I can come up with $5000 to give her. (she did NOT negotiate on this price- I tried) This $5000 will pay her off to abandon her interest in the property. (may I repeat that he filed bankruptcy at the end of 2010-almost 2 years ago!) I basically see it as extortion, but am looking for some opinions on this. She has actually held onto it for almost 2 years just waiting for a foreclosure to happen? This disgusts me. [/COLOR]
[COLOR=black]If my ex-husband would have affirmed the house, I would not be having this issue. [/COLOR]
[COLOR=black]My question to the community is: Can a trustee hold on to a property for this amount of time without signing off? Shouldn't I have been informed that a trustee is now "part owner" of the house with me? What is the time limit? Where are MY rights? [/COLOR]
[COLOR=black]It infuriates me that I have to pay this trustee off. I could file a motion to have a judge force her to abandon the property, but I do not have time to wait as my buyer is almost out the door as it is. [/COLOR]
[COLOR=black]Any thoughts would be welcomed. Thank you. [/COLOR]

Yikes. I'd call an attorney.

Sub: #1 posted on Tue, 06/26/2012 - 06:27

OhioGal1 OhioGal1
Moderators Cum Industry Expert
(Posts: 5253 | Credits: )

Unfortunately, you might be SOL. Under 11 USC 363(h) the Trustee can sell the estate???s interest in an asset AND the co-owner???s interest. Getting kick-backs from short sales where the Trustee should have abandoned the property - is becoming all too common. I would like to suggest the following "light" reading: m/showthread.php?68870-Can-trustee-require-current-financials-18-months- post-discharge-(Chap-7)

and p?75674-341-and-we-get-this-so-called-quot-diligent-quot-trustee


Sub: #2 posted on Tue, 06/26/2012 - 10:05

despritfreya despritfreya

(Posts: 170 | Credits: )

Thanks for the replies- Sounds like this type of stuff happens more than I thought.
Des, you wrote:
Trustee can sell the estate???s interest in an asset AND the co-owner???s interest

Question: How can the trustee sell MY interest in the house if I am the owner and am NOT part of this bankruptcy?

I have decided to pay the trustee to abandon her interest... and will take it up in court later to have my ex-husband pay this (or at leasat 1/2 of it).

Enough is enough! What craziness this all has been....


Sub: #3 posted on Wed, 06/27/2012 - 16:17


Question: How can the trustee sell MY interest in the house if I am the owner and am NOT part of this bankruptcy?

Because the Bankruptcy Code says he can. 11 USC 363(h) states, in part, ". . . the trustee may sell both the estate???s interest. . . and the interest of any co-owner in property in which the debtor had, at the time of the commencement of the case, an undivided interest as a tenant in common, joint tenant, or tenant by the entirety".

The section then goes on to explain the limits a trustee has in doing this but, for the most part, the co-owner gets shafted.

You are caving into the Trustee???s blackmail. From what you said you are paying her $5k so that you can go through with a short sale. Why would you do that? Why are you not simply walking away? I do not see how you benefit by paying off the Trustee. Quite frankly, depending upon what state you live in, the only one who benefits from a short sale is the realtor. Can you elaborate further?


Sub: #4 posted on Wed, 06/27/2012 - 18:38

despritfreya despritfreya

(Posts: 170 | Credits: )

I guess I do not feel I am "caving in". I am opting for 1 of two choices my lawyer gave me in opting for a short sale.

I want to go through a short sale because I have a better chance of not owing anything in the end to the mortgage company. Once they write it off as a short sale and it is listed that I do not owe a deficiency, I am good. If I were to foreclose, I would have the entire balance (owed amount - sold amount) that the mortgage companies could go after me for. They wouldn't have to do it right away either- they could wait a year or two. This is something I do not want hanging over my head. Keep in mind, my ex-husband is not liable and so they would only come after me.

Foreclosure is a real option if something doesn't happen soon.

I guess I weighed it: 5K to pay trustee off and then to close the short sale deal and not owe any more money and be done with this hell- OR go into foreclosure and risk having to pay back the deficiency (way more than 5k) and dealing with this headache far into the future. The short sale has been approved already by my main mortgage.

After 6 years of dealing with this nightmare, I opted for the quickest/cheapest way out- and hopefully the less damaging to my credit.

I just do not feel that what the trustee is doing is legal, but perhaps it is. If so, I need to work on getting that law changed. I do plan to look into this (and to take my ex to court) after this is all said and done.


Sub: #5 posted on Fri, 06/29/2012 - 13:25


I understand your concerns and my response is "go with your gut". The problem I have with the idea of giving away $5k is that, even if the Trustee abandons this worthless asset (that you have now given value to), what guaranty do you have that the short sale will go through? Are you throwing good money after bad? Next question. . . Are you a candidate for a bk? It is clear that you live in a state that allows for deficiencies after a residential property is foreclosed. However, if you are a candidate for a bk then why not get it over with and save the $5k (just a thought)?


Sub: #6 posted on Fri, 06/29/2012 - 16:27

despritfreya despritfreya

(Posts: 170 | Credits: )

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