Why can the Chapter 7 Trustee Select the Real Estate Agent? Many people going through a chapter 7 that own a house that they are surrendering may find that the Trustee assigned to their case wants to try and short sell the property.
If they can negotiate a carveout of money in the transaction with the mortgage companies then there are funds that can be applied to the debtor’s unsecured creditor class. Chapter 7 Trustee Selects Real Estate Agent.
To understand why the Trustee gets to select the real estate agent, you have to understand that when a debtor files a bankruptcy the Trustee is placed in charge of all assets that the debtor owns and has. This is a matter of law and it is a fair trade.
In order to get protection from creditors and hopefully wipe out all or nearly all debt, for a period of time the debtor has to give the Trustee his assets. In the end, assets that are exempt or protected will be returned to the debtor.
Accordingly, while a person has an active or open bankruptcy case, it is the Chapter 7 Trustee Selects Real Estate Agent for the property and not the debtor.
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