Trustee Blog

Motion to Sell Auto

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Chapter 7 Trustee Robert Whitmore’s job is to sell pieces of personal property that are not exempt. This is done by a motion. Recently Judge Houle had a case with Trustee Goodrich on selling such an auto.

Motion For Sale of Property under Section 363(b) Trustee’s Motion for Authority to Sell Vehicle Back to Debtor

The “Debtor” filed a voluntary Chapter 7 petition on March 25, 20xx. The duly appointed chapter 7 trustee in this case is Robert Goodrich (the “Trustee”). The Debtor received a discharge on August 3, 20xx.

Among the assets listed on the Debtor’s Schedule B is a 2007 Toyota FJ Cruiser (“Vehicle”). On June 13, 20xx, the Trustee filed a Motion for Sale of Property under § 363(b) (the “Motion”). No opposition has been filed.

The Debtor’s Schedule B values the Vehicle at $16,675 while Kelley Blue Book (“KBB”) indicates it is worth approximately $17,750. The Trustee wishes to sell the Vehicle which is free and clear of any liens. Based on the higher KBB valuation, the Trustee believes that, subtracting 25% for the costs of sale and the Debtor’s claim of exemption in the amount of $2,725, the Vehicle will net the estate $9,781.25 at auction. The Trustee asserts that the Debtors have agreed to pay, and indeed turned over, $9,000 in order to retain the car while ensuring the Vehicle’s equity remains property of the estate. The Trustee believes a sale of the Vehicle to the Debtor is in the best interests of the estate.


Discussion: Sale of Estate Property Pursuant to Section 363(b)

The trustee, after notice and a hearing, may sell property of the estate. 11 U.S.C. § 363(b)(1); see also Commodity Futures Trading Comm’n v. Weintraub, 471 U.S. 343, 352 (1985). The sale must be in the best interests of the estate and the price must be fair and reasonable. In re Canyon Partnership, 55 B.R. 520 (Bankr. S.D. Cal. 1985); see also In re Wilde Horse Enterprises, Inc., 136 B.R. 830, 841 (Bankr. C.D. Cal. 1991)(sale must have fair/reasonable price, accurate/reasonable notice to creditors and sale made in good faith).


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