Motions to Abandon

by Nicholas Ortiz, Boston Bankruptcy Attorney

November 25, 2008

In a Chapter 7 case, usually property that can’t be exempted is sold and distributed to creditors by the trustee.

However, at times property is burdensome or of little value to the bankruptcy estate. In these circumstances, abandonment of the property is appropriate. If the case is going to be open for a while pending the administration of assets, abandonment requires an affirmative act.

However, only the trustee in a Chapter 7 case has the power to abandon an asset. For another party, such as a creditor or a debtor, abandonment requires a motion, which may be contested by the trustee. There is also currently a $250 filing fee for motions to abandon property.

Since the trustee has the discretion to abandon property, it makes sense, if possible, to negotiate the trustee’s assent to the abandonment before filing a contested motion:

References: 11 USC 554; Fed.R.Bankr.P. 6007.

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Nicholas Ortiz, Boston Bankruptcy Attorney

From Attorney Ortiz: We have been helping consumers and small businesses in Massachusetts successfully navigate through the bankruptcy process since 2002. We offer free initial consultations and payment plans. Call us at 617-716-0282 to discuss your debt relief options. Mention the Bankruptcy Law Network when you call!

Last modified: November 25, 2008