Oftentimes people who contemplate filing for bankruptcy are bogged down by debt. Their focus tends to be that they are broke and have no money to pay their debts, such that assets are an afterthought if a thought at all.
When filing bankruptcy, not only are income, expenses, and debts considered, assets also play a vital role in selecting the Chapter one decides to file under.
What is an asset? An asset as is a financial contract or physical object with value that is owned by an individual, company, or sovereign, which can be used to generate additional value or provide liquidity. See Black’s Law Dictionary Free Online Legal Dictionary 2nd Ed, http://thelawdictionary.org/asset-2/ (last visited July 21, 2016).
Asset is not specifically defined by the Bankruptcy Code. In a nutshell, an asset is anything of value that can be converted to cash.
Bankruptcy law takes into account any assets that are owned that could be converted to cash to satisfy debt obligations. Everyone owns assets. Everything you own meets the definition. Some examples are: the right to receive a tax refund; clothing; shoes; homes; household appliances; health savings accounts; and, pets.
The question becomes what value does the asset have and can it be converted to cash?
It is important that you fully disclose what assets you own in order to determine what assets you can protect and keep under the law as you could risk losing assets when you file bankruptcy or have legal judgments filed against you. This can make a difference in whether you should file a Chapter 7 or a Chapter 13 bankruptcy case. It is important to seek help from an experienced legal professional to navigate the bankruptcy process. We are here to assist you.
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The Law Office of Tracy A. Brown, P.C. is a local St. Louis bankruptcy law firm with experienced attorneys that can help you understand all aspects of your current financial situation and your debt relief options. We can help to make the process of filing for bankruptcy protection as easy as possible.