Assets can be protected in bankruptcy. However, you must disclose them. Whether you are filing a Chapter 7 Bankruptcy or a Chapter 13 Bankruptcy, when you meet with me for a free bankruptcy consultation, I will review:
- What Bankruptcy is best for you.
- Assets and how they affect your bankruptcy filing
Here is an example of a Valentine’s Day Ring that Debtor threw in the lake. The Trustee with the help of a scuba diver – recovered the bankruptcy asset.
Bankruptcy Assets – Ring is an Asset
- Debtors said they forgot about a ring worth $46,295 when they filed for bankruptcy.
- Wife stated she threw the ring into a nearby lake because it reminded her of her husband’s marital infidelity.
- Husband admitted purchasing the ring for $31,000, had the ring reworked for another $4,510.
- Appraisal had been done and the ring was valued at $46,295.
- Coincidentally the ring was listed on their insurance policy for $46,295.
- Debtors explained it was wife’s sister’s ring and finally admitted it was their ring.
- Debtors stated they did not have it when they filed for bankruptcy (since it was in the lake) so they did not list the ring.
- At trial, wife admitted she threw the ring into the lake on Valentine’s Day because they believed it was cursed.
Bankruptcy Court Ruling:
- Context matters in determining Debtors’ states of mind when failing to disclose the ring.
- Timing -Debtors first met with a bankruptcy attorney in the Fall, nine days later they filed for bankruptcy.
- Due to the dramatic nature of how the ring landed in the lake and the sentimental value – Court did not believe that an event that happened just one week prior to meeting with a bankruptcy lawyer and less than 2 months before filing – Wife’s explanation of such a short memory was hard to accept.
- Chapter 7 Trustee hired scuba diver just weeks before the trial and the ring was found – the ring did exist.
- Debtors were also found to have loss of memory in transferring another asset, a cabin, 6 months prior to filing.
- Bankruptcy was denied. Maybe the ring was cursed…
Bankruptcy Assets Protection:
Filing bankruptcy is an excellent mechanism for honest debtors to get a fresh start. Otherwise, debtors may never be able to recover from their debts.
However, during my free bankruptcy consultation with clients, I clearly outline what is required in a Debtor’s bankruptcy petition.
Call me today, I will take the time to meet with you, understand your situation, explain bankruptcy, and recommend if filing bankruptcy is right for you.
