It is important in drafting your bankruptcy that you list all of your assets… especially if you want to keep them!
What do you mean by “assets”?
Generally speaking, the term “assets” refers simply to all of your property. It does not matter if the property is worth a lot, or just a little. If it belongs to you, you need to list it as an asset on the form known as the Schedule B along with a fair market value of the asset. Common assets are household goods…beds, kitchen tables, dressers, pots/pans, clothing, bikes, and shoes…everything in your house. Other common assets include checking and savings accounts, cars, motorcycles, business interests like LLCs or partnerships, accounts receivables, and retirement accounts. Some uncommon assets include mineral rights, commissions owed under a contract, tax refunds, and even animals. Basically, anything you own or have an interest in is considered an asset in your bankruptcy and it must be listed on the “Schedule B,” a document prepared by your attorney. Real estate is listed on the “Schedule A,” another document that is part of your case.
Why do I need to list all of my assets?
Because in a chapter 7 bankruptcy, a person’s assets could be liquidated, or sold off during the bankruptcy process, to pay part of the person’s debts. For this reason, the bankruptcy code requires that a person filing bankruptcy list all of his or her assets so that bankruptcy court trustee can review any property that could possibly be liquidated as part of the bankruptcy.
Am I going to lose some of my assets if I file for bankruptcy?
The answer in the vast majority of bankruptcy cases is no. This is because under the bankruptcy code, as well as state non-bankruptcy law, there is a long list of property that is considered statutorily protected, meaning that you cannot lose such property in bankruptcy. Property that is considered protected in your bankruptcy is known as “exempt property.” The concept of “exempt property” is an extremely important concept in bankruptcy. For this reason, “exempt property” will most certainly be a future blog topic in and of itself. For purposes of this blog post however, the main point is that in the typical chapter 7 bankruptcy case, perhaps in 99% of all the cases handled by the Zaleski Law Firm, all of a person’s assets are statutorily protected or “exempt.” Therefore, although such assets need to be listed and valued in the bankruptcy paperwork, they are not liquidated or lost.
What do I need to do?
In our first meeting, we will go over a list of all of your property or “assets.” In fact, to get a head start, just print out and fill out the asset/property inventory form on my web site. Here is the link. We will make an assessment of whether you have any assets that could be at risk in a bankruptcy or whether, like most clients, all of your assets are statutorily protected.