Bankruptcy

What's an Abandonment in a Bankruptcy Case?

By Joseph McDaniel, Esq.

It's mostly a remedy for the bankruptcy trustee, who doesn't want to have items on his plate, in his bankruptcy estate, that are worthless and burdensome.

Your house is probably one of those assets.

And the effect of the abandonment is to toss the asset out of the bankruptcy estate. And usually back into the arms of the debtor. As long as the debtor keeps making any payments that are due on the asset, which is normally a house or a car.

Abandonment usually shows up in cases under Chapter 7, because a trustee has different obligations in a Chapter 13, and doesn't need to "administer" assets in the same way as a Chapter 7 Trustee.

The closing of a bankruptcy estate without administering an asset listed in the case has been held to be the legal equivilent of an abandonment.

NOTHING HERE CONSTITUTES LEGAL ADVICE RE A CHAPTER 7, CHAPTER 13, CHAPTER 11, OR CHAPTER 12. FIND AN ARIZONA BANKRUPTCY LAWYER WHO IS BOARD CERTIFIED IN BANKRUPTCY LAW, AV RATED, AVVO 10 RATED, ON SUPERLAWYERS, OR JUST VERY EXPERIENCED AND A FORMER CHAIR OF SOME BANKRUPTCY SECTION OR COMMITTEE. NOTHING HERE MAY BE USED AS LEGAL ADVICE IN CONNECTION WITH ANY BANKRUPTCY, WHETHER THAT BANKRUPTCY IS IN PHOENIX, GLENDALE, TEMPE, MESA, SCOTTSDALE, OR ANYWHERE ELSE.

Full post as published by Arizona Bankruptcy Attorney Blog on August 25, 2009 (boomark / email).