When Can Chapter 7 Debtor Sell Or Rent Upside Down Property Listed O...

One of my bankruptcy clients owns an upside down investment property. The client listed the property as an asset with no equity and stated his intention to reaffirm the debt. If the trustee does not assert an interest in the property then the client will try to find a tenant and use the rent to pay the mortgage.

Forty five days after the trustee meeting the client wants to know when he can or should look for a tenant. He wants to know if the trustee has a time deadline to either pursue or abandon this property.

Bankruptcy trustees are supposed to abandon assets of inconsequential value. The trustee has until the bankruptcy is closed to make a decision. In the meantime, this debtor should not take any actions involving this property because the property is part of the bankruptcy estate until abandoned. The debtor, or any other interested party, may file a motion asking the bankruptcy court to order the abandonment of the property.