Acosta, No. 09-32340DM (Bankr. N.D. Calif., May 24, 2011).
When you file for Chapter 13 bankruptcy, you propose to the court a plan to repay your creditors. During the course of this plan, the court must approve many of your decisions, including the decision to hire a realtor to sell property. The court will want to look at how much you will pay the realtor to decide whether the fee is reasonable. Also, the court will look to the terms of your deal with the realtor in order to decide that they are fair and appropriate.
In this case, Demmie Acosta asked the court’s permission to hire a realtor to sell two pieces of property she owned in San Francisco. She had already found a buyer for the properties, and the realtor was going to represent both her and the buy in drawing up the deal.
The court did not like the deal, because the realtor was going to represent both sides. The court decided this was a conflict, and that the realtor was not likely to represent her interests as well as he could if he was only representing Demmie. The court told Demmie that she could hire the realtor, but that he should not represent both sides. She hired him to represent them both anyway, and the deal was completed.
When Demmie asked for the court to approve the realtor’s fee, the court reluctantly agreed to pay half of the fee, but not the whole thing until other creditors were paid. This is all part of the reorganization during a Chapter 13 bankruptcy, the trustee is ensuring that each creditor is paid and treated equally in the bankruptcy and repayment of the debts. Because Demmie and the realtor did not follow the court’s advice, the court granted a less favorable deal that put in question whether the realtor would be paid.
If you are wondering if Chapter 13 bankruptcy could be for you or you have questions about the bankruptcy process in general, you should contact an Arizona bankruptcy attorney today! That is the most effective way of determining which route you should go when starting the process of bankruptcy.
Stephen M. Trezza
