Thursday, November 21, 2013

Can a Trustee Sell Real Property if it is Claimed as Exempt and has no Equity? - Yes....at least in the 4th Circuit

The 4th Circuit, in an unpublished decision, determined that a Debtor who has no equity in their home but claiming a homestead exemption, is unable to stop a sale by the Trustee when the Trustee could receive a carve out from the creditor.  In this case, the Debtors home was fully encumbered by a first and an IRS lien.  The IRS agreed to a carve out and the Trustee filed a motion to sell.  The Debtor's objected to such sale.  The Court found that the asset is still property of the estate and the Trustee had standing to sell.

Reeves v. Callaway - 4th Cir. Unpublished

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