St. Louis Bankruptcy Lawyers Blog

Because not disclosing to the Bankruptcy Court a list of everything that you have an ownership interest in can possibly result in the court ruling that you have committed bankruptcy fraud. So it’s really not worth withholding information, especially when the item in question is just a simple piece of personal property.

When you file a St. Louis bankruptcy, it is necessary for you to do a number of things. These responsibilities will include providing evidence of household income over the six (6) months prior to filing (this is usually the last six month’s worth of paystubs), your most recent tax returns (which is usually your federal and state returns from the year before), and an accounting of all of your assets (whether it is in the form of personal or real property).

Real property is easy enough to disclose. You just provide a list of all the real estate in which you claim an ownership interest in. This could be your home, rental property, farmland, a camping site, or timeshare. The main thing that the Bankruptcy Trustee will be interested in will be whether or not there is any equity in the property. If there is substantial equity in any real property that you own, it is possible that the Trustee will either want to liquidate it in a St. Louis Chapter 7, or make you guarantee the amount of equity to your unsecured creditors in a St. Louis Chapter 13. Whatever the case may be, it is not as if disclosing to the court what real estate you own means that you will lose these assets. In today’s real estate market, with declining values and the number of foreclosures increasing yearly, the fair market value of most homes is less than what is currently owed on the mortgage loan (in other words, most houses are “upside down,” and therefore have no equity at all).

No, not at all. In fact, if your attorney knows what he/she is doing, then it is quite possible that all of your belongings will remain with you (and therefore out of the Trustee’s hands).

When you file a St. Louis bankruptcy, it is necessary for you to disclose to the court in writing all that you have an ownership interest in. But let’s be clear: “disclosing” your assets and personal property is not the same thing as handing them over to someone. When you make a disclosure, you are simply saying “this is what I own.” And according to the Bankruptcy Code, it is your duty to make the court aware of all that you own.

Once this task is accomplished, your attorney will then attach the applicable state exemptions to your property in order to make it safe. Exemptions are like little shields of armor that are placed around your property to keep out of the hands of the Bankruptcy Trustee. Each state has certain exemptions to cover certain assets (if you have lived in the state of Missouri for at least the last two years, then MO exemptions are utilized). For example, the state allows for a $3,000 exemption for your personal property, such as furniture, dishes, appliances, etc. This may not sound like a large exemption to cover such things, but keep in mind that you will be giving “garage sale value” for these items. Garage sale value is considerably lower than what you paid for the item in the first place (or even what you think you should get for it, and certainly lower than any sentimental value attached to the item in question). Most people have household goods that are at or below this threshold, so exempting all of their things is no problem.

It depends on a number of factors, but the main consideration to keep in mind is that if the transfer was significant or large, then it is possible that the Bankruptcy Trustee would want to investigate the matter.

But let me back up just a little bit. When you file a St. Louis bankruptcy, the court requires that you disclose a great deal of information about yourself. Included on this list would be everything that you own (cars, houses, clothes, furniture, and jewelry; but also things like bank accounts, stocks and bonds, mutual funds, and retirement plans; and then there may also be lawsuits that you are a part of from which you may receive funds). The reason why such a disclosure must occur is because the Trustee is entitled to know exactly what you own (or have an ownership interest in). This is because the Trustee’s main job is to determine if there are any assets you own that have a good deal of equity or value. If in fact there are any assets that have a good deal of equity or value, it is possible the Trustee would want to liquidate the asset, and use the proceeds to pay towards the unsecured creditors that will be discharged in your Missouri bankruptcy.

But the Trustee is also entitled to know if you have made any transfers of goods, assets, or money to an “insider”. An insider is described as a friend or family member (so obviously not a typical unsecured creditor like a credit card, medical bill, or payday loan). Whenever a transfer is made to an insider, the main thing that the Trustee will want to know is: how much was transferred. The Trustee has an opportunity to look into any insider transfers within the full year preceding the filing of your St. Louis Chapter 7 bankruptcy.