Bankruptcy Filers Need To Know What Is An Asset

When a person files for bankruptcy, they must list all of their assets and liabilities on their bankruptcy schedules. This is to help the court administrate and determine which assets the debtor should be permitted to keep and which assets will be subject to liquidation by the trustee for the benefit of the creditors. If someone is going to keep property during a bankruptcy case, it will need to be listed in their bankruptcy schedules with the proper exemption provision (if any) indicating why that property is allowed to be retained.
Often times, people forget what may be included as an asset. The following are commonly overlooked assets that if not listed in the bankruptcy schedules, could lead to seizure of the assets by the bankruptcy trustee: Accrued vacation pay, unpaid insurance claims, class action lawsuits, liquor licenses, timeshares, trademarks, season tickets, and security deposits.
I have even had the circumstance where the debtor disclosed at their 341 hearing that they had forgotten that their daughter’s home was in fact titled jointly in both their names. Fortunately for the debtor, that home had very little equity and the debtor’s bankruptcy petition was easily modified to protect the asset. Had the property had a lot of equity, this could have been a fatal mistake.
Just as there are things that people often forget are assets there are also things that people think are assets that actually are not. For instance, homes and cars are almost always thought of to be assets. However, this is not the case when the property is worth less than what is owed on it. In the case of property being worth less than what is owed on it, it ceases to be an asset of the debtor and is instead an asset of the secured creditor. This means that the debtor needn’t use up any of their exemptions to maintain ownership of the asset.
If you would like to know what may qualify as an asset in your case, contact a Jacksonville Bankruptcy Lawyer or call us at (904) 685-1200 for a free consultation.