Legal Question in Bankruptcy in New York

Re: Can someone sell of assets when bankrupcy has been filed for

There are different chapters of bankruptcy (i.e., Chapters 7, 13, & 11) available to individuals. You do not indicate under which chapter the individual's bankruptcy case has been commenced.

In a chapter 7 case there is a chapter 7 trustee who is responsible to marshal and liquidate the debtor's non-exempt assets. So if the debtor is selling his assets without authorization to do so this should be brought to the attention of the chapter 7 trustee. Same with respect to chapter 13 (although there the trustee is the chapter 13 trustee).

In chapter 11 the debtor is typically a "debtor in possession" and no trustee is appointed. However, parties in interest, such as creditors, can seek appointment of a trustee under certain circumstances (such as dissipation of assets by debtor without authority, for example).

In a chapter 11 case it is possible for a debtor to sell assets pursuant to section 363 sale even though a reorganization plan has not yet been confirmed. However, such sale would still require bankruptcy court approval pursuant to motion brought on by notice to creditors and other interested parties.

The foregoing is intended as general information of interest to readers of this website and should not be considered legal advice for your specific situation. If you are owed a substantial sum of money you should hire an experienced bankruptcy attorney to protect your rights in connection with this debtor's bankruptcy case. I am active in such matters and would be happy to speak with you. Feel free to call me at 8888678165.

You can also find additional information regarding chapters 7, 13, and 11, and bankruptcy and creditors' rights topics generally on the Frequently Asked Questions on our website at www.starrandstarr.com/faqs.htm

Best regards,

Re: Can someone sell of assets when bankrupcy has been filed for

Your debtor may, in fact, be selling assets under the direction of the Bankruptcy Trustee; if that's the case, the Trustee is making sure that funds are available to pay all creditors, including you. If it's not the case, there may be another reason why the sale of assets is permitted. Without knowing the case, your question cannot be answered effectively on this board.

You need to contact an attorney who handles creditor bankruptcy issues to get this matter looked into sufficiently. Contact the Capital District's Bankruptcy Bar for a referral to a creditor's attorney. You can find a link to their website from the site of the US Bankruptcy Court for the Northern District of NY (www.nynb.uscourts.gov ... or maybe that should be nbny?)

THE INFORMATION PRESENTED HERE IS GENERAL IN NATURE AND IS NOT INTENDED, NOR SHOULD IT BE CONSTRUED, AS LEGAL ADVICE. THIS POSTING DOES NOT CREATE ANY ATTORNEY-CLIENT RELATIONSHIP BETWEEN US. FOR SPECIFIC ADVICE ABOUT YOUR PARTICULAR SITUATION, CONSULT YOUR ATTORNEY.