“When we went through the numbers, after you deduct cost of sale, there’s really no equity in my property, but the trustee wants me to pay because he doesn’t want to honor those cost of sale. What should I do?”

This is a very complicated question, and it has to do with an individual’s taste for risk. Technically, the trustee is right; you don’t get to profit and benefit by the fact that the trustee has to pay cost of sale if the trustee decides to sell your home in bankruptcy.

On the other hand, the trustee knows that he does have to pay cost of sale if he wants to sell your home, and he’s gonna have to figure out whether or not he wants to go through the trouble and the effort to sell your home when it’s likely he’s not going to get anything from creditors. That’s why there’s a little bit of a tension between the debtor and the trustee when those situations occur.

So, the question is do you want to play chicken with the trustee? And I can’t answer that question. Only you can, but the truth is, the trustee is not likely to force the issue if it’s a very, very close call because real estate is not a liquid asset, it does take time to sell it.

If you decide that you want to stop paying the mortgage, that’s going to make it more difficult for the trustee to sell and it’s going to reduce the amount of time the trustee has to sell, and all things considered, the trustee may not want to deal with that problem.