Sanjana decided to make an assignment in bankruptcy after she lost her job.Times are tough and she just wants a fresh start in life.She put all of her goods into the hands of the trustee appointed in her case, including a '61 Thunderbird coupe that her father left her when he passed away several years before.Since then, the car has sat under a tarp in a neighbour's garage.Sanjana estimates that the trustee should be able to get at least $80 000 for such a fine vintage model.Sanjana can

Question

Quizplus · Accepted Answer

Sanjana cannot hold on to the car as exempt property because the exemption laws may require her to declare it as non-exempt. She cannot require the trustee to seek her estimated amount before selling, nor can she auction the car herself and pay the proceeds to the trustee, as once she files for bankruptcy, she loses control of her assets. Giving the car to a particular creditor is not an option either as it would not be fair to other creditors. The best option is to let the trustee sell the car, and if it pays off all her creditors and the costs of the bankruptcy administration, she would obtain the residual amounts in the estate.

Sanjana Decided to Make an Assignment in Bankruptcy After She