bjbj My name is Ron Drescher. I m an attorney
practicing in bankruptcy and commercial litigation. I m licensed in Maryland, Virginia, Pennsylvania
and Delaware and today I d like to talk about what a no-asset bankruptcy case is. In bankruptcy
as I ve said before, there are really two cases going on. There s a case regarding you
and your discharge and then there s a case regarding the property that the debtor brings
into bankruptcy. The trustee is going to analyze whether there is value in that property above
the secured claims and the exemptions. For example, let s say there s a piece of property
worth $200,000.00, it s your home. Let s say your mortgage is $210,000.00. In that case
there s no equity in your property, the trustee will abandon it and there won t be anything
for unsecured creditors. Let s look at a different situation. Let s say you re in Maryland and
your property is worth $200,000.00 and let s say the secured debt is $180,000.00. Well
you re entitled to a $21,000.00 exemption to protect your home. So we add the $180,000.00
and the $21,000.00 and that s $201,000.00, which is more than the value of the home.
Under those circumstances the trustee s also going to abandon the home because there s
nothing for him to distribute to unsecured creditors after it s sold. Now, let s say
the house is $200,000.00, the secured creditor is $160,000.00 and you ve got a $21,000.00
exemption. What the trustee would probably do is decide well, I m going to probably have
to pay a realtor 6 percent and I m probably going to have to pay 2 percent other closing
costs. That percent less that s about $16,000.00 off the $200,000.00 that s going to be $184,000.00
left. I ve got to pay the $160,000.00 mortgage; I got to pay you your $21,000.00 exemption,
that s going to leave $3,000.00 left. Some trustees will sell your house to get $3,000.00
to pay to unsecured creditors. Other trustees will say you know what, that s not worth it;
I m not going to go through that trouble because really I may not get the $200,000.00. That
s a judgment call that the trustee is going to make in that case, but if the trustee decides
to abandon your house and not sell it, if there are no other assets available because
you have used all of your exemptions on your personal property and your clothes and your
car and your other possessions, then the trustee will say there s nothing there to distribute
to unsecured creditors, it s a no-asset case and I m going to close the case. Then if you
get your discharge and the trustee says it s a no-asset case, then the case is going
to get closed. Frequently the trustee will make that decision immediately after you have
met with the trustee 30 to 40 days after you file your case. So you re not going to be
in suspense for very long if it s pretty clear that you have a no-asset case. My name is
Ron Drescher. I m an attorney practicing in bankruptcy and commercial litigation and if
you have a question about any of this, I d love to hear from you. [Content_Types].xml
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