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Selling debtor’s assets and using proceeds to pay creditors

To “maximize value,” the trustee is authorized to sell any nonexempt property owned by the debtor that has monetary value exceeding any encumbrances and to use the proceeds to pay administrative costs and creditor claims (see ¶ 10:97 for order of distribution). The trustee may also sell partially exempt property, but must pay the debtor the exemption amount, distributing the balance of the proceeds. Where (as is frequently the case) the debtor’s assets have little or no “value,” creditors will receive no distributions from the Chapter 7 estate.

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