What does abandonment of property by a trustee mean?

The debtor's property under the administration of the bankruptcy trustee is considered the bankruptcy estate. When a trustee abandons property, he or she has released it from the estate. Property possessed by the debtor is typically abandoned to the debtor; however, property encumbered by liens might be abandoned directly to the secured lien holder for repossession.

Abandonment of property by trustees occurs when selling the property wouldn't cover the costs of arranging a sale, including when the cost of maintaining ownership is expensive compared to value. Often, property that the hasn't been administered (i.e. sold) by the trustee is abandoned at the closing of the chapter 7 bankruptcy case.

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