Many lawyers and debtors have asked over the years, “How small is too small?” In other words, what are the odds of a trustee seizing a vehicle with $500 of non-exempt equity?

In the past, the answer was clear-cut; in my home courts, a trustee usually wouldn’t bother with a small asset because it just wasn’t worth it. Other places, however, tell a different tale - I’ve heard of trustees would would administer a $200 asset.

So my research into the subject led me to the case of In re Heath, 115 F.3d 521 (7th Cir. 1997). In Heath, Judge Posner was confronted with an adversary proceeding filed by a bankruptcy trustee seeking to recover $50. The court rendered judgment for the trustee, but the district court reversed, 198 B.R. 298 (S.D. Ind. 1996), and the trustee appealed.

Judge Posner, in reversing the district court, stated:

The trustee’s motivation in pursuing this minuscule claim through three courts eludes us. But as there is no minimum amount in controversy required to litigate under the Bankruptcy Code, we must treat this $50 case - which in fact involves important questions of law - with all the gravity of a $50 million case.