What does it mean when a trustee abandons property?
A. When an asset’s liquidation value can’t even pay off the secured creditors, the trustee “abandons” it, or simply put; gives it back to the debtor. As in our car example above, although the debtor has been discharged from the obligation the security interest runs with the collateral. The debtor gets to keep the car because the trustee abandons the asset, but if a workout can not be achieved or the payments made, the car will be reposessed even though the debtor gets back title.
When the liquidation value of an asset cannot pay off the secured creditors, the trustee “abandons” it, or simply gives it back to the debtor. Although you’ve been discharged from the obligation, if a workout can not be achieved or payments made, you’ll probably lose the property at a foreclosure.
