Why Do You Need a Bankruptcy Attorney?

Why Do You Need a Bankruptcy Attorney?

Generally, in a bankruptcy case when a Trustee attempts to sell property free and clear of any interest in that property they must fall under one of the five subsections outlined in Bankruptcy Code Section 363(f). Specifically, Section 363(f)(4) allows the Trustee to sell the property free and clear if such interest in that property is in bona fide dispute. To protect your interest in your collateral you must know what a bona fide dispute is. Luckily, an experienced bankruptcy attorney at the Kass Shuler Law Firm, can help!

Bona Fide Dispute with a Bankruptcy Attorney

While bona fide dispute is not defined in the Bankruptcy Code, several Courts have fashioned a generally similar definition. Courts have held that a bona fide dispute exists when “there is an objective basis for either a factual or legal dispute as to the validity of the debt.” In re MMH Automotive Group, LLC, 385 B.R. 347, 370 (Bankr. S.D. Fla. 2008) (citing In re Gulf States Steel, Inc. of Alabama, 285 B.R. 497, 507 (Bankr. N.D. Ala. 2002).

Evidence for Bona Fide Disputes

When the Trustee moves to sell property free and clear under the bona fide dispute theory, it is the Trustee’s burden to show that a dispute exists. While Courts require evidence that shows that there is an “objective basis” for the dispute, the court is not required to make any findings as to the outcome of the dispute but rather only determine that a dispute does exist.

How Can a Bankruptcy Attorney Help?

While some cases may present obvious situations in which a bona fide dispute exists, most cases will not be so cut and dry. It is always recommended that you hire an experienced bankruptcy attorney who can help you navigate these complex issues and help protect you from having your interests being stripped through a 363(f)(4) sale. Contact us at the Kass Shuler Law Firm to learn more.