I own an ASSET in someone else's Bankruptcy... HELP.

[Brett838]

Long Story Short...  I borrowed $50K from a local business man.  I signed a promissory note (Unsecured).  He now has filed bankruptcy.  My note is now an asset in his bankruptcy.  The trustee and I are not seeing eye to eye on the balance owed.  I've offered about 50% payoff with no result yet.  Does anyone know the steps the Trustee will take next?  Lawsuit for judgement? Liens? or don't they deal with that since they need to close their file at some point.

[ezdriver]

The trustee can, and likely will, request a court hearing to "examine the asset value". You will be ordered to appear in court for that hearing. The trustee's job is to dtermine what they can collect from you and they will not hesitate to go after your personal assets if they believe that you have the ability to pay bak the full amount owed.

For example, I did Ch 7 bankruptcy. I have a car with a car loan. The value of the car from my assets point of view was zero. However, the trustee decided to go after the auto loan company when he came to believe that the lien on the car may not have been filed properly. The trustee threatened to seize the car ... until the loan company produced adequate documentation to protect its own interest in the car. I would have been screwed if the trustee did seize that car and he did not care.

[StartingOver10]

Remember, the Trustee represents the creditors in the BK and they get paid a commission on every dollar they are able to find in the debtor's estate. Your note to the debtor is definately attractive to the Trustee. IIRC I think the Trustee's commission is 10% of the asset value.

[ezdriver]

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@StartingOver10 wrote:

Remember, the Trustee represents the creditors in the BK and they get paid a commission on every dollar they are able to find in the debtor's estate. Your note to the debtor is definately attractive to the Trustee. IIRC I think the Trustee's commission is 10% of the asset value.

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There is a limit prescribed in law. I copncluded that my trustee's objective was simply to get some money in his pockets, as well as the pockets of an attorney associate he retained, and nothing left for creditors. The trustees will squeez what they can from whomever they can. I concluded that they operate as they come before the creditors.