One of the main things to take into account before deciding to file for bankruptcy protection from creditors is to know if a prospective client may lose assets or property in the process. It is the duty of a bankruptcy attorney to discuss any remote possibility that their client’s property or assets may be at risk. This is true because the average layperson comes to the attorney’s office with the expectation that a bankruptcy filing will eliminate all of their debts with no payment being made to creditors and they can keep all of their property and assets. This mistaken belief cannot be further from the true reality. Property that can be kept when filing bankruptcy is regulated by state law and bankruptcy law and some types of property debt must be totally repaid if the person expects to keep the property in question.
Although it is usually immediately apparent at the consultation that the prospective debtor cannot afford to make their monthly payments or cannot pay a judgment after a lawsuit, it is not so easy to determine if a person may lose their property or assets if they file bankruptcy. This is one of the main reasons why it is so important to have a legal consultation with an experienced bankruptcy lawyer. The bankruptcy process mandates that the debtor, presenting the bankruptcy petition through their attorney, provide complete and accurate proof of the value of assets and property to the bankruptcy court. Any assets or property that is not protected by law for the benefit of the debtor becomes the property of the bankruptcy trustee, who administers the case for the debtor’s creditors. At the consultation, the bankruptcy attorney will be able to ask questions about the debtor’s principal residence, any second homes or investment properties and their values, vehicles, bank accounts and all other assets. The bankruptcy lawyer knows that the debtor’s entire assets and property must be itemized and priced individually in the bankruptcy schedules submitted to the court.
Bankruptcy counsel must then discuss with the debtor if any of the values of the debtor’s assets are in amounts above the total protected amounts allowed if one files bankruptcy and must tell the debtor if the bankruptcy trustee may seek the property or its monetary value. It is imperative that the bankruptcy attorney’s firm and staff ask detailed questions and receives complete answers from the debtor in order to protect the potential candidate from losing any property or pay for unprotected assets in bankruptcy court. Depending on the type of debt, the bankrupt debtor brings into the bankruptcy case, the debtor may have to make difficult choices. Regardless, any choices made should be made with the aid of an experienced bankruptcy lawyer, reviewing the person’s assets and property, and looking out for the best interests of the client. Call me, for a free bankruptcy consultation at your earliest convenience.