Think You Don’t Have Assets? Think Again
One of the most important components of a petition for bankruptcy is a list of all assets you possess. If you’re considering bankruptcy, you probably don’t feel as though you own many assets. However, this term probably encompasses more items than you think. Read on to learn about how an asset is defined under bankruptcy law, and what sorts of items are included under that definition.
Anything with value is an asset
When you hear the term “asset,” you probably think of items with high monetary value, like a house or a car. For the purposes of your bankruptcy petition, “asset” is defined much more broadly to include anything you own that has value. In other words, if you have clothes on, you have assets. The trustee is entitled to learn about anything you own which could, at least in theory, be sold to satisfy your debts. Don’t fall into the trap of believing that you only need to disclose items that can realistically be sold, however—sometimes the ability of the trustee to sell a particular asset is almost purely theoretical.
Some assets are liquid, some are non-liquid
A “liquid” asset is something that is either in cash already, or has a clear cash value and could be converted into cash fairly simply, without losing much or any value. Liquid assets range from the cash in your wallet, to your checking account balance, to the cash value of a life insurance policy, to the value of any stocks or bonds you may own.
“Non-liquid” assets include the physical items you own. These can be harder to value accurately, as their value can change over time. Your car may be worth much less now than when you bought it five years ago, but an antique piece of furniture may have grown in value. Household goods, such as kitchen appliances, furniture, or clothing all count as assets that you must disclose—even your household pets. It’s extremely unlikely that a trustee would sell Mittens the cat, but she still goes on the list. Whether or not you own an item free and clear, if you own it, it’s an asset. For example, you may still be making payments on a car loan, or making mortgage payments on your home, but they’re still considered assets belonging to you.
Composing an accurate list is critical
There are even more items that must be included in a bankruptcy, including things you’re entitled to receive but haven’t gotten yet. Producing an accurate list of assets, and ensuring that the most important to you remain exempted from bankruptcy, is one of the many good reasons to hire an attorney. If the bankruptcy trustee finds out that you failed to include an item you own in a list of your assets, you are prevented from exempting that item from liquidation. An attorney can both make sure the list is complete, and that you’re able to prevent the sale of the items most dear to you.
If you are considering filing for bankruptcy or are facing foreclosure in Maryland, contact experienced and compassionate Germantown consumer law and bankruptcy law firm Haeger Law for a free consultation on your case, at 888-463-3520.