Exempt or Abandoned Property

Debtors may be able to claim certain property to be exempt from bankruptcy court jurisdiction under either federal or state exemption provisions. In order to insure title to exempt property sold by the debtor, the property must be abandoned or the conveyance approved by court order. Property of the estate which was properly scheduled in the bankruptcy proceedings may be abandoned by the trustee if it can be shown that such property is burdensome or of inconsequential value to the estate. A court order approving the abandonment should be obtained and recorded in the land records. Exceptions for liens on property as a result of an abandonment proceeding must be reflected since such proceeding will not eliminate liens which were properly perfected and attached to the property prior to commencement of the bankruptcy proceedings. Liens against abandoned property which were recorded at the time of the bankruptcy filing or which attached to the property or against the debtor/owner after bankruptcy must also be shown as exceptions to title, unless otherwise discharged. With respect to insuring transactions involving property abandoned through bankruptcy, the order of abandonment must be recorded. After the order of abandonment has been recorded, title to the abandoned property re-vests in the debtor who may then deal with the property outside of the bankruptcy.