Monthly Archives: July 2018

My car has too much equity and the chapter 7 trustee is selling it at auction. How long until I get my money from my car exemption?

Forever.  (Probably 3-4 months)

So my client had a truck that we knew had too much equity when we filed the case.  (Under Utah law, I can protect $3,000 of equity in one vehicle if your name is on title).  We decided to file the case, and we’d see how much excess equity the auctioneer would find.  If there was a tiny bit of equity, we could make payments to the trustee to keep it.  If there was too much equity, then we would give up the truck and pocket the $3,000 from the exemption.  

However, it took forever.  We turned over the vehicle in the first part of June, it won’t be sold until the August 25th auction, and my client should receive his $3,000 in September.  That means he goes almost 4 months without a vehicle waiting for that $3,000 to buy another one.

Here is the chain of email (with some helpful redactions) to show you the progression:

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April 18, Trustee …

Robert, My search of NADA and KBB suggests the 2007 4×4 F150 has a $6,000 value. This suggests a $2,400 non-exempt equity after deducting 10% for costs and expenses of auction sale and $3,000 exemption. Can you show me valuation for $3,750? Perhaps Mr. X should take the truck to Erkelens and Olson for value? (801-355-6655)

April 18, BK Attorney (me) …

His truck is in fairly poor condition and the four-wheel drive is one of the systems that is not working. I’ll have him contact Erklens.

May 17, Trustee…

Robert,

Thanks to Mr. X for taking the truck into E&O for value.

E&O values the truck at $7,500. After 10% for costs and expenses of sale, and the $3000 exemption, there is $3,750 of non-exempt equity. Does Mr. X want to buy this equity from the estate or deliver the truck to E&O for auction sale?

May 29, Bk Attorney…

Mr. X is prepared to turn over his truck to E&O for auction. He has asked me to see about the possibility of delaying turning it over until the last minute so that he can keep using it for work. Please let me know when he needs to turn it over and I will relay the message.

May 29, Trustee…
to me
Since he has decided not to keep it, he needs to turn it and the title over as soon as possible. In fact, he should be paying the estate for his use of the truck since petition. Depending on how this shakes out, I may argue that he is consuming his $3,000 exemption.

June 8, Trustee …

Can you confirm that Mr. X has delivered the truck to E&O?  If not, can you have him deliver the truck and then let us know when it is delivered.  We have a 727 deadline on June 18, so it would be nice to get that issue resolved before then.

June 8, Bk Attorney…

He advised me that he delivered it earlier this week.

July 17, BK Attorney…

Did his truck ever sale?  Debtor is asking when he’ll see his $3,000.

July 17, Trustee…

There was not enough time to get the truck in E&O’s June bankruptcy auction after it was delivered.  E&O’s next bankruptcy auction in October.  The trustee is trying to get it into an earlier auction.  I will keep you posted. 

July 17, Trustee …

E&O is going to auction the truck on August 25.  You should see the motion for approval to sell in the next day or two. Hopefully this help.

July 17, BK Attorney…

If it auctions on the 25th, how soon until he’ll see his $3,000 exempt proceeds?

July 17, Trustee…

Usually about two weeks or so.