Selling Assets While a Chapter 7 Case Is Open
When a chapter 7 is filed, the debtor’s assets become part of the bankruptcy estate. Individual chapter 7 debtors are permitted to claim certain exemptions in property that have the effect of protecting the asset from liquidation by the chapter 7 trustee. A significant number of chapter 7 filings are “no asset” cases because all of the debtor’s assets are exempt or the assets are of inconsequential value to the bankruptcy estate. However, while a chapter 7 is pending the debtor is not permitted to sell or otherwise transfer estate assets. Chapter 7 cases are generally open for 100 days but can be open for a much longer period of time. Chapter 7 cases can remain open after a discharge order has been entered. If a chapter 7 case is open and the debtor wants to sell or otherwise transfer an estate asset then he/she will need to file a Motion to Compel Abandonment. If the Motion is successful then the asset will be removed from the bankruptcy estate and the asset can then be sold or otherwise transferred.
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For more than 20 years, the Sasser Law Firm has been helping individuals and business owners sort through financial hardships to see the light at the end of the tunnel. Our North Carolina bankruptcy attorneys are all board-certified specialists, which means we have passed a complex exam, undergone a thorough peer review, and continue to earn legal education credits in this ever-evolving area of law.
