You are required to follow a number of rules and procedures when you file for Chapter 7 bankruptcy. How those rules affect your assets can vary according to different factors. To understand what happens with your assets, it is important to understand what is required of you and how the bankruptcy trustee ensures you follow those rules.
Are Your Assets Liquidated?
As part of a Chapter 7 bankruptcy, you are required to sale, or liquidate, any of your assets that are not covered by an exemption. An exemption allows you to maintain possession of assets that have a combined value that is below or at the amount set by the state. For instance, if your state has a $50,000 exemption limit, you can keep assets that have a total value at or less than the $50,000.
Who Decides Which Assets Are Sold?
The bankruptcy trustee has the responsibility of evaluating all of your assets beyond the exemption. At that point, the items that have value can be taken and sold. It is quite possible that you will not lose too many assets in your bankruptcy since the trustees could be more focused on assets with high values.
If you chose not to use your exemption to save your home, there is still a chance that the trustee will not take possession of it. If your home has no equity or its value is not enough to cover the costs of sale and the commission the trustee would receive for handling the sale, it is possible the trustee will pass on taking the home.
When a trustee passes on a home, he or she formally abandons it and you have permission to keep it. Your creditors cannot come after the remaining assets because they were part of the estate and it has already been thoroughly evaluated.
Can You Hide Assets?
It is possible to hide assets from your trustee, but it is not advisable. There are many ways a trustee can find an asset, including reviewing your financial statements. If the trustee discovers that you have hidden an asset, he or she can ask the court to dismiss your bankruptcy case. Although this sounds horrible, it can get worse.
Criminal charges can be filed against you by the court. When you failed to disclose all of your assets on your legal filing, you committed fraud. If this happens, you could face serious consequences, such as probation and heavy fines.
If you have any other concerns regarding how your assets are handled in your bankruptcy filing, talk to an attorney like Arthur M Richard.Share