The big bankruptcy decision is fraught with several problematic issues, and this is certainly one decision that requires careful evaluation. Among other concerns is the potential to lose some of your property with a chapter 7 bankruptcy filing. There is a reason that another name for a chapter 7 is "the liquidation filing", so read on to learn more about what you may have to lose and how the role of the bankruptcy trustee comes into play.
Who is your trustee? You may first encounter this person when you receive your initial bankruptcy paperwork from the courts, but you may only actually see them in person once or twice. One time is at the creditor's meeting, which is really your one and only court appearance for the filing. You may also meet your trustee, or one of the trustee's representatives, at your home inspection.
What is the home inspection? First of all, it should be noted that not all filers will have to undergo a home inspection. Once you learn the motive behind it, you might understand why you could be singled out for this practice. One of the primary duties of the bankruptcy trustee is to locate any property or funds that could be used to pay your creditors. While you may think that you can just turn your back on your unsecured debts, such as your credit card, the trustee is there to find out what you might have that can be turned into some quick cash to reduce the burden on your creditors.
Will you have a home inspection? That depends on several factors. Remember that the trustee is only interested in items that can bring revenue, so your used furniture and other used items are not likely to be of any interest to the trustee. On the other hand, if you have a shiny boat in your yard, they may take an interest. You will be submitting information about your assets when you file your chapter7, and if something valuable catches the trustee's eye you may need to go through a home inspection.
Another important factor is the amount of your bankruptcy. If your total bankruptcy debt is only about $50,000, the trustee is probably not going to take your home if it's worth $150,000. It should be noted that the trustee does earn a percentage on all items seized, which is a certain percentage of the item's value. Finally, you will have exemptions available to reduce the value of your home, cars and personal property. These exemptions often allow filers to keep their property.
What to know about the inspection. Even if you are scheduled for an inspection, you are not going to lose any property that day. You will be notified of any seizures and arrangements will be made for picking up any property. In most cases, the inspection consists of photography and note-taking and may last for 15 minutes or even less.
Seak financial legal counsel during your home inspection for more information about what to expect.