Understanding No Asset Cases

no Assets

Looking for Your Assets

The prospect of filing bankrupt can be quite daunting. What do you file? Should you go for Chapter 7 or for Chapter 13?

Chapter 7 bankruptcies are often those most sought after, as they can often lead to total dismissal of your debts.

How does that work?

In order to have your debts completely discharged, several things must happen. However, the first thing that must happen is a determination of your assets.

Many Chapter 7 cases turn out to be “no asset” cases. What are these? Essentially, this is when you have too few, or no, assets sufficient to pay your creditors if they were sold. What constitutes an “asset,” though?

Obviously, things like second homes, extra vehicles, boats and the like can be considered assets. Even your investments can be considered assets, if they are salable. However, few people realize that even lawsuits can be considered an asset in a bankruptcy case. What does this mean?

Consider the prospect of filing bankruptcy. You are attempting to file for Chapter 7, but you fail to mention to your lawyer that there is a lawsuit on your behalf pending settlement. This might seem relatively logical.

After all, the lawsuit has not been settled yet, therefore you have not received any benefits from it to count as assets, right?

Actually, this is wrong. Any lawsuit through which you stand to receive monetary compensation must be included as an asset during your initial consultation with your bankruptcy attorney.

First, it is mandated by federal law. Failure to do so can result in some rather unpleasant effects.

What might happen in such a “no asset” case? Jail time, heavy fines and other ramifications are distinct possibilities.

In addition, you will certainly incur additional legal fees, additional holdups on your filing and schedule changes. This can result in some very serious problems in your life, not to mention causing your attorney untold headaches.

Make certain that you have the legal help you need for the best possible chance of success.

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