Can the trustee assign her avoidance powers to me, the creditor, or to the debtor? 6 Answers as of July 31, 2014

There is a fraudulent conveyance in this case of the debtor's house to his ex-wife, the avoidance of which would more than satisfy all the claims of all the creditors, but the trustee is choosing to abandon this claim. Do I need to wait for her to abandon it before I go after the fraudulent transferee as a creditor? For some reason, the trustee and her lawyer think I should be forking over a lot of cash to purchase this claim that they think has no merit, and are offering at the same time to settle the preferential transfer claims in this way. My understanding is that I have a separate cause of action (separate from the trustee's) in this case and don't see why I should be purchasing the cause of action from the trustee.

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You probably need to file an adversarial action in the bankruptcy case.
Answer Applies to: Minnesota
Replied: 7/31/2014
The Law Office of Darren Aronow, PC
The Law Office of Darren Aronow, PC | Darren Aronow
In most districts that I know of, you have no avoidance powers, only the trustee does. So it sounds as if the trustee is trying to "sell" their avoidance power, which may or may not even be valid.
Answer Applies to: New York
Replied: 7/31/2014
Ronald K. Nims LLC | Ronald K. Nims
The trustee's avoidance power isn't created by the bankruptcy law, the bankruptcy law merely allows the trustee to use (if she/he so chooses) the avoidance power that the creditor already has under state law. So, the way you, as a creditor, would use your avoidance power is to request that the bankruptcy court lift the automatic stay and allow you to pursue your avoidance power in state court. Of course, the trustee could block this motion, if she/he intends to use the avoidance power in the bankruptcy. Now it might seem that the trustee is abandoning a significant interest in the house, however, the debtor has a $132,000 exemption for his homestead interest - his equity is less than that, there is no interest that you can take as a creditor.
Answer Applies to: Ohio
Replied: 7/31/2014
Law Office of Melissa Botting | Melissa Botting
The answer to your question lies in your comments about your preferential transfer claims. Is it in your best interest to pay the preferential transfer amounts in full or settle with the trustee?
Answer Applies to: Texas
Replied: 7/31/2014
Steele, George, Schofield & Ramos, LLP
Steele, George, Schofield & Ramos, LLP | Alan E. Ramos
In my opinion, you have no separate cause of action. When the debtor receives his discharge, the debt to you will be discharged and you will no longer have a legal claim against the debtor. The only way that you can legally prosecute a claim against the debtor is to obtain the right from the trustee. Any action without taking that step would be a violation of the discharge injunction, leaving you open to sanctions. k here.
Answer Applies to: California
Replied: 7/31/2014
    Thomas Vogele & Associates, APC | Thomas A. Vogele
    The trustee can certainly abandon the claim to you or any other interested party, however, they usually want the proceeds to go to the estate's creditors and not just you. You should contact the trustee and see if she will stipulate to abandon the claim, but that must occur before the case is closed. Alternatively, you must file a motion to compel abandonment. Such a motion also must be filed before the case is closed so get moving if you want to recover!
    Answer Applies to: California
    Replied: 7/31/2014
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