Tuesday, February 12, 2013

Selling Assets in an Oregon Chapter 13 Bankruptcy Case

A question I get a lot from my current chapter 13 clients is whether they can sell something they own to free up a little cash while they are in chapter 13. Many clients are worried that if they have a garage sell, or put a few things on craigslist that the Trustee is going to want the money.  In Oregon once your plan is confirmed by the Court an Order is issued by your bankruptcy Judge. This Order controls what has to be reported when a debtor in chapter 13 sells an asset. The Order states that:

  "The debtor shall not buy, sell, use, lease (other than a lease of real property in which the debtor will reside), encumber or otherwise dispose of any interest in:  (a) real property; or (b) personal property with a value exceeding $10,000.00 outside the ordinary course of business without notice to all creditors and the trustee, with an opportunity for hearing unless such property is acquired through the use of credit and the trustee's permission is obtained....."

This essentially means that if a debtor sells an asset and receives over $10,000 they must notify the Trustee and all creditors before they sell it.

So, if my clients ask if they can have a garage sale to generate a few hundred dollars I tell them that is fine and just to inform me if they plan to sell any larger items such as cars, boats and other big ticket items.

For more information about Chapter 13 in Oregon and Washington visit our firm.