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Property you keep
Abandonment
Abandonment is when the trustee gives up the bankruptcy estate's hold on a piece of property because it is a burden to the estate or worth too little to be of real benefit to it. 1
Talk to a lawyerHow it works
In a Chapter 7 case with assets, the trustee's main job is to sell nonexempt assets so that unsecured creditors get the largest possible return. Abandonment is the tool for property that is a burden or worth too little to serve that purpose. 2 1
The trustee can abandon property after notice and a hearing, and the court can order it when someone with a stake in the case asks. Property you listed in your schedules that has not been dealt with by the time the case closes is abandoned to you, unless the court orders otherwise. 1
When all of a debtor's assets are exempt or subject to valid liens, the trustee normally files a no asset report and unsecured creditors receive nothing from the case. 2
Abandonment does not cancel a loan or a lien. A secured creditor, such as a car lender, may still be able to take back the property that secures its loan, even after a discharge. 2
Common questions
What happens to property that was never listed?
Property that is not abandoned and not dealt with in the case stays part of the bankruptcy estate, unless the court orders otherwise. That is one reason to list everything you own. 1
What does abandonment have to do with redeeming a car?
Redemption lets an individual keep certain personal-use property by paying the lender the amount of its allowed secured claim in full. The property must be exempt or abandoned, and the debt must be a dischargeable consumer debt. 3
Sources
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