When you file bankruptcy you are required to list all of your assets on your bankruptcy petition. In fact, you will be required to testify under oath that you have listed all of your assets and any interest you may have in an asset.
A commonly over looked asset is monies owed to a debtor. For example, you lent an ex-girlfriend $3,000 nine months ago. She has not paid you back and you have been unsuccessful in your collection efforts. This is an asset in your bankruptcy, it is money owed to you. Although, your collection efforts have been futile, that has no bearing on the validity of the asset. Depending on the case, the funds owed may be a protected asset. But, if the funds owed are not able to be protected in your case, the bankruptcy trustee may pursue the individual that owes you the funds on behalf of the bankruptcy estate. This means the trustee can sue the individual that owes you the money.
In this example, the debtor is unlikely to care if the trustee sues his ex-girlfriend. But, there are times when the debtor may not want the person who owes him the money to be sued. For example, in a divorce settlement your ex-spouse has agreed to pay you $10,000 over a course of time. On the day of filing your bankruptcy your ex-spouse still owes you $9,000. This is an asset that needs to be disclosed on your bankruptcy petition. If the funds cannot be protected in your particular case, the trustee could sue your ex-spouse for the funds owed or reach an agreement with the ex-spouse for the funds owed. Some individuals do not want their ex-spouses involved in the bankruptcy. This means the bankruptcy filer would have to reach a settlement with the bankruptcy estate.
Even though the debtor is not in possession of the funds at the time of the bankruptcy filing-their interest in the funds existed at the time of filing and the debt owed is therefore an asset.
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It is important to list all of your assets on your bankruptcy petition. It is required that you do so and your attorney can help you plan for those assets you are unable to protect in your bankruptcy case. Contact the attorneys at LifeBackLaw and see us at www.LifeBackLaw.com and let us help you get your life back.