When filing a motion to sell what are the general procedures when referring to a chapter 13 case?

Answer 1

I don't know if the procedure varies from state to state, but in Indiana one normally files a Motion to Sell real estate (or whatever property) with the Bankruptcy Court. The motion normally lists what is being sold, what it's value is, how much it's being sold for and other sale terms, why it's being sold, etc. Then, the Court verifies that a fair price is being received for the property and also orders where the proceeds of the sale will go. If the property being sold is claimed as exempt on Schedule C, the debtor usually retains the funds. If the property is not claimed as exempt, then the proceeds of the sale normally go into the Chapter 13 Plan. Sometimes even if the prperty is claimed as exempt, the court will make the debtor pay the funds into the Chapter 13 Plan but will then let the debtor shorten the length of the Chapter 13 Plan. There are also collateral issues with selling something in a Chapter 13 the court will look at, such as what the sale does to disposable income. For example, if a debtor sells his house which had a mortgage payment of $1,000.00/month, then rents something for $600.00/month, the court will say that the debtor's disposable income increased by $400.00/month so the Plan payment will go up $400.00/month (since a debtor normally has to offer all of his or her disposable income to the Plan). Please note that nothing in this posting or in any other posting constitutes legal advice; this is simply my understanding of the facts, which I do not warrant, and I am not suggesting any course of action or inaction to any person.