Bankruptcy & My Guns

[Dick Unger]

The Trustee will "own" everything you have on the day you file, including any right to rebuy your guns. But if the Trustee would have to pay full value, he will abandon that right. List the "right" to rebuy with your assets. Be prepared to answer questions. If you've reserved the right to rebuy, it indicates the guns have value, otherwise, they could be some bubba'ed up junk, not worth much

If you have NOT filed, you can sell for full value and spend the money on lottery tickets, or beer, or anything that you consume and then file.

If you HAVE ALREADY filed, then you'll have to negotiate with the Trustee. It usually is not worth it for a Trustee to administer a small asset, he has to pick it up from you, sell it, (while complying with all gun laws) and then do paperwork, then keep a small commission, and send out a proof of claim to creditors, review these documents, reprot to the Court, and then send each creditor a proportionate amount of the proceeds of the sale. I've gotten them to abandon things like small boats and fishouses because of the cost and hassle.

It's easiest for him to sell the guns back to YOU. Start with a low offer, maybe $200. He'll have to sell them wholesale and will only want to devote a few minutes to making the arrangements, unless he's a gun guy who enjoys complicated non-lawyer work. He might make $40 for this work. And for just a couple hundred dollars some Trustees will simply abandon. They like to recover assets in the thousands at least.

[JohnGageMN]

So, if you don't have any assets worth more than a few hundred bucks then all your stuff is pretty safe I take it?

[gyrfalcon]

So, if you don't have any assets worth more than a few hundred bucks then all your stuff is pretty safe I take it?

Yeah, kinda...unfortunately

[nyffman]

The Trustee will "own" everything you have on the day you file...........

Where does BATFE come into the picture? Serious question. With all this transferring to Trustee and possibly back to owner, is there any paperwork that has to be completed with them?

[gyrfalcon]

Where does BATFE come into the picture? Serious question. With all this transferring to Trustee and possibly back to owner, is there any paperwork that has to be completed with them?

If I'm not mistaken the trustee and property that's put into the trust can be given back directly to the owner if it's not liquidated in the bankruptcy. If they were a known felon the court would probably step in when they found out about the firearms. The trustee has to sell/liquidate the firearms in a manner that meets state and federal regulations. If the firearms are not sold they're just returned to the owner, similar to a firearm that's put on consignment in a store.

[gyrfalcon]

...Now we're about to file the bankruptcy papers. The attorney, or actually the paralegal, says they're not able to exclude my guns from the the bankruptcy...

If only you could have waited a bit longer, this bill might have passed in the senate: http://www.govtrack.us/congress/bill.xpd?bill=h111-5827

I believe it allows you to keep under $3000 in a bankruptcy.

[DeanC]

The 111th Congress is closed.

[gyrfalcon]

The 111th Congress is closed.

[Dick Unger]

The Trustee will "own" everything you have on the day you file...........

Where does BATFE come into the picture? Serious question. With all this transferring to Trustee and possibly back to owner, is there any paperwork that has to be completed with them?

Well, that's another question for the Trustee to worry about, is it not. BATFE is not part of the bankruptcy system, but the Trustee would be expected to comply with any rules or laws, federal state and local. Think legally pickup the guns, legally transport the guns, legally possess the guns and legally sell the guns. I think the Trustee is probably not an FFL, (he'll be just a lawyer) so he can sell them as he wishes. But he may not know that, and he'd want to do an FFL transfer, I think, to protect himself in case a crime was later committed.

I assume a Trustee he would sell only TO an FFL, because he wants no liability for himself, and he can hardly afford to advertise and show the guns himself. So, he'll probably sell wholesale, first offer. It depends on the individual trustee, how agressive he is and whether he's done it before. Some guys would hire and off-duty cop to do this, a deduct the cost from the sale of the guns. (As a debtor's attorney I'd recommend that procedure to a Trustee. Be safe and cautious and all:)lol:

All this favors the debtor.

In legal terms, two revolvers of unknown condition at pawnshop wholesale prices are not worth much to the Trustee. I once offered $300 for a boat; (on behalf of a debtor). I heard nothing, the matter went to discharge, called the Trustee and he abandoned the boat. He would have had to hire someone to pick it up and sell it and the $300 was the best offer. However, he didn't want to fool with such a small sum of money, because he'd have had to send out about 40 letters and deal with tiny payments. There were no other non-exempt assets to administer in this case.

There's the law school answer, and the real world answer. Your mileage may vary...

[sochr000]

...It usually is not worth it for a Trustee to administer a small asset, he has to pick it up from you, sell it, (while complying with all gun laws) and then do paperwork, then keep a small commission, and send out a proof of claim to creditors, review these documents, reprot to the Court, and then send each creditor a proportionate amount of the proceeds of the sale. I've gotten them to abandon things like small boats and fishouses because of the cost and hassle.

Another option, sell the gun to me(with aforementioned deal SS was talking about), then, if they do decide that reclaiming it is a good idea, you can remind them I live in Bemidji. Now they're looking at a 4hr drive in addition to the headache... Might even be willing to leave the guns under the care of someone like SS, so they're with someone you trust.