When you are involved in a Chapter 7 bankruptcy that will require you to sell property to satisfy debts, you will eventually be faced with what is called a motion for turnover. A motion for turnover is the formal legal name for the paperwork that will allow your non-exempt property to be seized by the local sheriff, working on behalf of the bankruptcy court. When your bankruptcy trustee files the motion for turnover, this is the first step in the process of your property being sold to the highest bidder at a sheriff's auction or sale, at which time the monies received will be given to your creditors to satisfy some of your outstanding debt. (See also what bankruptcy trustee duties to be aware of).
Understanding a Motion for Turnover
A motion for turnover is filed officially by the bankruptcy trustee who is in charge of your case.
- A bankruptcy trustee is appointed by the bankruptcy court, and is presumed to be working on the behalf of your creditors to insure that they receive the highest possible amount of the monies that they are owed by you before the case is settled.
- A motion for turnover is filed after any objection to exemptions has been filed. An objection to exemptions is where the bankruptcy trustee specifically objects to property that you have claimed exempt from the bankruptcy proceedings and which is therefore untouchable by the court for resale to satisfy your creditors.
- After the bankruptcy trustee has successfully determined what items of your property are exempt and which are non-exempt, he or she will file a motion for turnover.
Appealing and Protecting Your Assets
You can appeal a motion for turnover in certain cases. Ideally, you would appeal the objection to exemptions in order to make sure that as much of your property as possible is listed as exempt from the bankruptcy proceedings. Once you have attempted that, you can appeal the motion for turnover if you feel that the valuation of your non-exempt items is incorrect. For example, if your 1999 Chrysler Sebring convertible has a blue book value of $9500, but similar cars are only selling for $4500 in your area, you can contest the motion for turnover based on the valuation of the car being incorrect.
Once the motion for turnover has been filed, it is typically automatically granted by the court. Your only options are to fight the motion by appealing it based on valuation, or based on your property status as exempt or non-exempt. If the deadlines for appealing have passed, you may not have a choice as to whether you have to turn over the property or not.
Getting Help
If you are filing bankruptcy, you need to have an experienced bankruptcy attorney to guide you through the process. Your attorney can provide you with more specific and detailed information on the process of filing bankruptcy and can help you interact with your bankruptcy trustee to ensure the bankruptcy proceeds smoothly.
