When The Bankruptcy Trustee Comes To Call
Some chapter 7 bankruptcy filers may overlook the possibility of having to surrender personal property to the bankruptcy trustee. While the vast majority of filers never have to give up any property, certain situations can call for a home visit to inspect personal holdings. This visit can create distress among some filers but it doesn't need to. Read on to find out more about home visits and the red flags that might prompt the trustee to schedule a visit to your home.
Personal Assets and Chapter 7
Filers of all income levels can be subject to an inspection to verify the presence and value of items listed on the property inventory paperwork filed with the bankruptcy bundle. In some instances, trustees randomly inspect the property of a filer regardless of what is on their paperwork. With chapter 7 bankruptcy, filers can use state exemptions to keep certain types of property depending on the value of the property. If a filer still owes money on something, it is seldom taken. When a vehicle, boat, or home does get seized, it is sold and the proceeds used to pay bankruptcy administrative costs and some high-level creditors like the IRS.
Does Your Bankruptcy Case Exhibit These Red Flags?
In some cases, filers may cause the trustee to be curious enough that they schedule a home visit. This is always done through your bankruptcy lawyer and you will have plenty of warning before they come. Take a look at some red flags that might create a need for the trustee to find out more:
- Your home is listed at a value that seems inaccurate for the size and location. It's not unusual for filers to postpone home maintenance needs and allow a home to fall into disrepair. When there are issues with a home's major systems, it can reduce the value of the home. In some cases, a home inspection lets a trustee (or their representative) see what is going on for themselves.
- You are the subject of an anonymous tip. Some filers try to hide assets from the bankruptcy courts to avoid losing them. A home inspection might verify the contents of the inventory list. You may also be asked, under oath, about your belongings.
- You list a lot of luxury goods on your inventory. If you have some luxury goods like artwork and expensive jewelry, you may have more that is not listed.
For a better understanding of what might call for a home inspection, speak to a lawyer at a bankruptcy law firm.