66 East Main Street, 3rd Floor Little Falls, NJ 07424

Home with Value to Homeowners but Trustee Wants to Take – The Court Decides

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  • Couple/Debtors filed for Chapter 7 Bankruptcy.
  • Debtors state their home was worth $108,000; they owed $91,581.
  • Trustee argued that he wanted to sell the home and evict the homeowners.
  • Trustee presented appraisal; and a realtor who said the property was worth $204,000 and felt the damages and the need for repairs were overstated.
  • Debtors presented appraisal: $185,000 after making repairs costing $60,000.00:   $171,000 after repairs of $63,000 were made

Court Ruling:

Granted Debtors’ motion to have the trustee abandon his rights in the property and the property remained with the homeowners.


Trustee appealed the Court’s decision; stating the homeowners were not a party in interest since they did not have a substantial interest in the equity of the home.   He also argued that they would not suffer any injury when he would sell their home.

Court Ruling:

Homeowners had standing and the Trustee must abandon his interests in the home and the loss of the home would constitute an injury.

There was  real tug of war for this house.