Biggest problem in Ch. 7? Buying back your assets from the Trustee
The most frequent issue I experience in closing a Ch. 7 bankruptcy case with discharge is the valuation of the client’s automobile. The trustee may object to valuations provided by the client. The trustee will insist on using “clean retail” value, which is several thousand dollars higher than the price a seller would receive from a third party buyer. As a result, a client may be asked to buy back the vehicle from the bankruptcy estate at an amount that shocks the client, given today’s economic environment and local employment conditions. Dismissing the case in that setting is difficult as the trustee may object to the voluntary dismissal of the case and judges prefer that the discharge be issued, even if assets must be turned over to the trustee to settle case.