heartglass

I need help , Trustee has order to sell my property

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the only thing I have is my business building according to the tax dept it is worth 89,000 that's what I owe ....I conduct business there .My income works out to about 800 per month , my taxes reflect that for the last 4 years .

I filed chapter 7 in Dec and was notified the unsecured debts were cleared as of March. My only assets are my car and business building, car I own value about 10,000 building worth from 80,000. to maybe 110,000.

Wells Fargo sent me reaffirm agreement last week .I have never missed a payment.

Today a realtor walks in the door with an order from the court saying the trustee owns my building and is listing it for 189,000. it is not worth that .

What do I do ..my building has my business in it .I liated my building under the homestead in the BK, I used federal exemptions in the BK what have I done wrong ? help...

 

going out of my mind ...S 

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I filed myself ...I am it , can not afford attorney that's why I filed myself :waah:

 

You are going to have to call a BK attorney.  This is very complicated.  Generally the trustee does not sell assets that have a lien on them that do not have 50% or more in equity.  Something isn't adding up.

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Its a shock to me I had not heard a thing ...and they do this ...it makes no sense , I have put a call into the trustee .I used the homestead exemption on my building the cma and taxes came in at 89,000. so I do not understand what they are thinking ,with  what I owe . Also the mortgage is in my name and my ex partners name I have reaffirmed it.

I used the federal exemptions opposed to state . does that make a difference?

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Generally the trustee does not sell assets that have a lien on them that do not have 50% or more in equity

 

 

This is an inaccurate statement.  A Trustee will sell anything that will bring a dividend to the unsecured creditors. If the asset will generate at least a $1,000.00 many trustees will go after it.  Trustees are even known to create equity where there is none by cutting a deal with the secured party to give the bk estate a kick-back (similar to a short sale).

 

Heartglass,

 

At the outset, I am going to guess that you owe income and/or payroll and/or sales taxes. Maybe there is even a tax lien. Am I correct?????

 

You should have not tried to file this case on your own, especially when you had a business and owned a commercial building.  At this point you are stuck and I strongly recommend you get an attny FAST.  You have your discharge therefore you most likely cannot convert to a Chapter 11 or Chapter 13.  You cannot dismiss your case either.  Your Trustee controls the building and has the absolute right to market and sell it.

 

Find an attorney.

 

Des.

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I used the homestead exemption on my building the cma and taxes came in at 89,000. so I do not understand what they are thinking ,with  what I owe . 

 

The first problem as has already been said by @bingo is that the homestead exemption is for a residence/home not a commercial building so more than likely the trustee did not allow it.  You must own AND reside on the property for it to be exempt.  

 

"Florida property tax homestead exemption reduces the value of a home "

 

The second problem is the tax assessed value is always WAY different than the real estate value of the property.  That is why they can list it for sale at a much higher rate.  The property tax assessed value of my home is $35,000 but its value is $96,0000 if I sell it.

 

I agree that you need to find a lawyer FAST.

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Thanks guys I figured out what I did wrong I did not file with the courts the reaffirmations docs ...My building in todays market is only worth 90,000 I owe 80,000 after realtor fees there would be nothing left it makes no sense. My home is in forclosure thats a lost cause I actually put in the paper work that my building will be my residence . Property values are terrible here in Oregon .

The bank has allready reaffirmed my loan on which I have a partner on the building ..so on the loan and building I have someone else its a tangled web.

Also the courts have disscharged my unsecured debts in the  first week of march. Thats all I had for debt I owe 2 years taxes but thats do able ...nothing else .

This is where I make a living such as it is ...I have just been delt a few bad hands for 5 years and am climbing out of the hole . My biz is picking up I have been at this location for 14 years to lose it would be devastating. I have calls out to the trustee and a lawyer friend ....they listed it at 189000 which makes no sense, the realtor even said they were nuts , go figure . S.

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I am going to answer you where everyone can see. You should have saved the money and gotten an attorney with the issue involving a commercial property.

The homestead exemption is only for your own home. You cannot use it for commercial property. If you were not claiming you own home, you might have been able to take a wild card exemption if you did not use it for other things but I am not an attorney so I cannot say for certain what happened.

As for the property, what the tax records say does not mean it is the value. The trustee gets paid based on whether the creditors can collect something from the assets. In this case, he saw the property, that it was not listed properly, and got his own appraisal which gave him the $189,000 figure that he is selling it for. Whether they can sell it for that amount, you will see. If the property does not sell, the trustee will have to lower the price until it either sells or the price gets so low that there is not anything in the estate after the sale and the trustee abandons the property.

When you declare BK, all property that you own on the day of the filing becomes the property of the bankruptcy estate (an entity created when you filed for BK) which is administered by the trustee. You do not own your property until it is determined that the property is exempted from the estate OR the trustee decided to abandon the property which then reverts to your hands. In this case, the trustee owns the commercial property and can do whatever they want with it. The trustee thinks they can get some funds from the property if they sell it, regardless of your business (which if a sole-proprietorship, also declared BK when you did so technically, the business is Bankrupt and kuput).

You need a good BK lawyer but I think you might have messed this up. Only the simplest of cases should be done pro se and even that, I do not recommend based on personal experience.

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First I have to agree with everyone here. Anyone filing BK with any real property needs an attorney. I know it doesn't help now, but many attorneys will accept a payment plan for filing a BK and help keep the creditors away during this time. I mentioned that in case anyone else comes here and is in a similar situation. 

 

Even though you are in a difficult situation you should still consider yourself lucky. A BK Trustee can file fraud charges against debtor if they think they are less than truthful or are trying to hide something. I'm assuming this trustee realizes you are in over your head and is just going for a little commission.

 

What you need to understand is that a BK Trustee is more than an administrative clerk. Many think of them as a judge which is definitely not true. They are more like commissioned sales people with a law degree. Its also not unusual for the trustee to employ private investigators and forensic accountants. They can also take money out of the BK estate to pay these employees. Some even pay attorneys in their own firms for "extra" legal work. The fact that you are self employed and own(ed) commercial property sent up red flags big time. Not to mention many trustees also are partners in BK law firms, so they see what is happening on the other side. I've been told the best way to avoid getting appointed an aggressive trustee is to hire his/her partner. That way they can't get your case due to it being a conflict of interest. 

 

This article really sums it up how a trustee operates. If a trustee can uncover just 50K then they make almost 6K. This is in addition to paying their other employees that helped recover the money. 

http://www.nolo.com/legal-encyclopedia/how-bankruptcy-trustee-paid.html

 

This is another article I ran across talking about how some trustees legally play the system to their own advantage. 

http://www.nwitimes.com/news/local/lake/hammond/bankruptcy-debtor-s-downfall-and-trustee-s-boon/article_3f060888-f764-5095-8d6f-012dd33f124d.html

 

I wrote the above so you can see what you are dealing with. I would guess 99.9%+ of the trustees would quit tomorrow if they were only paid $60.00 per case. You are not going to find a competent attorney in the U.S. that works for that kind of money. Even a JDB attorney would turn down that kind of work. 

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Another tactic the trustee may be using is to try and get some money directly from you or your partner. The trustee may realize that this will destroy your income and put a strain on your relationship with your partner. They don't care where the money is coming from as long as they are paid. Just assume that the property might be worth the high end you mentioned. (110K?) Just assume it sells for that amount. The realty company will probably get a predetermined discount percentage. (5%?) This leaves 104,500 minus the 80,000 loan. So they take your half of the 24,500 which comes out to 12,250. That gives the trustee a profit of $1,975.

 

Take the above example and the trustee comes to you and says I'll cut a deal. They ask you for 15,000 to close your case. Then they make even more but they "let you off the hook. You don't lose your business and you don't get into any further trouble in court. Like I said they don't care where the money comes from. If the bank gives you the money through a refinance, your ex partner puts up the money or a relative loans it to you doesn't matter to them. At this point they have the leverage and its all a business situation to them. If you can't come up with the money then the trustee keeps the property for sale and waits it out. They have very little tied up in this and you have everything to lose. Of course that 15K number is negotiable. They may take less, but you never know. I doubt the trustee believes the property is worth 189,000. That number may be high to get you motivated to hunt for some money.

 

Please realize I didn't write this to make you worry more, but you have to realize that you have to get an attorney involved. Do what ever you can to legally obtain professional help. You might want to start by just visiting a few BK specialist to see what it will cost and find out what they can do.

 

Good Luck!

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I figured out what I did wrong I did not file with the courts the reaffirmations docs ...My building in todays market is only worth 90,000 I owe 80,000 after realtor fees there would be nothing left it makes no sense.

 

 

Wrong.  There is absolutely no requirement to reaffirm a real property loan.  In fact, you should thank the stars that the paperwork did not get filed with the court and, therefore, there is no Order approving the agreement.  Had there been and you defaulted down the road, the lender would foreclose and then sue you for the deficiency.   Regardless, reaffirming is absolutely NOT relevant in your case as it relates to your Trustee.  In addition, your belief as to value is also not relevant.  Even if you think there is no equity the Trustee can attempt to sell the property "short" with lender approval and obtain a "kick-back".   Maybe the lender won't agree but the Trustee has the right to try.  And/or. . .  as suggested above, he can attempt to blackmail you and/or your partner into kicking in some $$ to "settle" the issue.

 

 

so on the loan and building I have someone else it’s a tangled web.

 

 

 

Again. . . wrong.  The Trustee has the absolute right to sell the interest of the bk estate AND the co-owner.  Read 11 USC 363(h). And. . . since, as you say, the property has no equity, your partner loses nothing.

 

 

I owe 2 years taxes. . .

 

 

 

Exactly as I suspected.  Did the IRS record a tax lien?  How much do you owe? 

 

 

I have calls out to the trustee and a lawyer friend

 

 

 

Skip the “lawyer friend” unless he/she is a bk attny.  You wouldn't hire a heart surgeon to do brain surgery, would you?  YOU NEED A BK ATTNY.

 

Now, on the less worrisome side, if the Trustee comes to the conclusion that he cannot make a buck off the property he will eventually abandon it.  Your bk attny needs to persuade him of the err of his ways.  If you try to do this on your own you may very well be screwed. . . get it?

 

Please recognize that I am not being obnoxious or disrespectful to you.  I am telling you like it is.  My firm makes a VERY good living off of cases exactly like this one.  We deal in controlling the damage caused by unsuspecting pro se debtors.  The bottom line here is that each and every response to your query is similar.  The property belongs to the Trustee.  The Trustee can do what he pleases.  You need a bk attny to assist you through this process.

 

 

Des.

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I'm sorry this happened to you, but there's probably not much you can do now.

 

I have worked per diem in an attorneys office in the past, and it amazes me what people are willing to do pro se.  If you needed your appendix removed, you would go to an appropriate surgeon and not pick up a scalpel yourself right?

 

It is the SAME exact concept for legal matters.  You filing a chapter 7 BK while owning a commercial real estate property is way way over your head, and is probably beyond the scope of most other peoples knowledge on this board as well.

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I was truthfull with the trustee even when I met with her , it was like a cattle call .

I just spoke with the bank and they are surprised , there is no fraud here .

Just trying do the right thing the wrong way. I am looking for a lawyer...

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Great every lawyer I call is not interested in a BK in progress ...just shoot me now !

any suggestions ?

Try this link.  Enter your city and state and see what pops up. . .

 

http://nacba2.memberpath.com/Consumers/FindYourAttorney.aspx

 

Edt to add. . .  if you are talking to bk attnys who do not want to step in, ask for a referral to one who might.  We typically step in and we do not advertise.  We get our clients from referrals.  I would imagine there are probably one or two (or more) attnys in your local who are similar to us. 

 

Des.

Edited by despritfreya
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I spoke with an attorney this morning he only reps the banks , said it sounded like I did every thing right , he said it seems the trustee does not understand there is no value in my building ....he  has offered to guide me if I need more help ...so I just have to get a hold of the trustee, who is not available until next week....

Thanks for the help

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I'm glad you found someone to help. You said he works for the banks, so I'm guessing that means he deals with bankruptcy issues. If he doesn't understand how the process works you need to make sure and get a second opinion. 

 

Some of these trustees will wipe you out to make less than a $1,000 commission. Just don't depend on him factoring you or your situation into the equation. Its a simple business decision for him. Even at a selling price of 95,000. the trustee can still make $1,200 and pay his employees and the other creditors out of the other 75%. The property may not be worth 189,000, but you did say it might be worth over 100,000. I can't stress enough the role of the trustee. The way he looks at it is that you were allowed to walk away from your other debt and that you have no right to anything above the maximum amount allowed by law. 

 

You and the trustee are viewing this situation in two opposite ways. If he agreed with you the property would not be for sale. Forget thinking about the 189,000 number because the trustee may be thinking half that. Like I said I hope the attorney you spoke with can help. Just be very careful or you might get in deeper. In my opinion you have two options. Hire an experienced BK attorney or find the money to make the trustee drop the sale. 

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This might be an old post at this point, but

 

(1) homestead is only for residence.

(2) tax valuations are almost always not fair market value, but partial value, then a multiplier (which varies every year) is applied to get to fair market value.

(3) In my district, if a real estate agent can show the trustee that after paying all liens, commissions, and exemption, there is more than $10,000 in net equity for creditors, they'll list and sell. 

(4) this is why you get appraisals and an attorney if messing with a Chap 7 with potential assets. 

(5) you need to get an appraisal, a GOOD attorney, and then consider filing a motion to abandon, it costs $180.  But you better have your ducks in a row before you file.  

 

Good luck!

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You could file a motion with the court to block sale as it is your principal place of business, also was the building bought with funds of your partner/s? The property may be part of an exemption of tools of the trade, or some other exemption. Look into BK claimed exemptions and find the exemption for tools of the trade.

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You could file a motion with the court to block sale as it is your principal place of business, also was the building bought with funds of your partner/s? The property may be part of an exemption of tools of the trade, or some other exemption. Look into BK claimed exemptions and find the exemption for tools of the trade.

 

I couldn't find anything here that might work.

http://www.oregonbankruptcy.com/exemptions.html

 

Maybe if the OP had moved into the property before filing the 25,000 exemption would have applied. Tools of the trade allows for 3K (6K if filed with spouse). An attorney might be able to make this argument, but the trustee seems to be looking for a lot more with a sale. That being said this might make it worth paying an attorney to see if this is possible considering the actual equity will only be half with the partner involved. 

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I filed myself ...I am it , can not afford attorney that's why I filed myself :waah:

You must need an bankruptcy attorney when filing for bankruptcy. You can file with your selves but its hard for you to handle your bankruptcy with your own hand.

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here is the update over a year later , this trustee put my property up for sale a year ago ,my bankruptcy was discharged last year. then she pulled it off ,.this year she filed with court to hire a lawyer at 450.00 per hour and filed to relist my property, which she did in May , listing was supposed to expire in dec, the realtor told me it would just die. Yes i hired a lawyer it did not help.

Yesterday I get word some one from California made an offer unseen. I have no idea how much, they say its supposed to close in Oct.

My business has been there for 15 years if I move it will be killed.I have no pension this is it .I have paid my mortgage down by 11000.since filing in 2013

So will she take that too ? The trustee listed my building at 149,000. Bank valued it at 100,000 cma I had done when I filed were between 70,000 and 98,000. I owed 81,000 in 2013 . Isn't the bk picture supposed to be at the time of original filing?

Please do not beat me for screwing up I need guidance ..thankyou

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