Which of my Assets may be Sold in Bankruptcy to Pay Creditors?
Hi. Matt McArthur, bankruptcy attorney at Clear Counsel Law Group. One thing to keep in mind when you're filing for bankruptcy, especially a chapter 7 bankruptcy, when you file for bankruptcy, your non exempt assets become part of the bankruptcy estate. Now, the bankruptcy estate is essentially the way of referring to your property that's not protected that is available for creditors. In a chapter 7 case, creditors get paid from the liquidation of the property of the bankruptcy estate.
That's a lot of big words there. Basically, what that boils down to is, if you have property that has any value, can you protect it or can it be sold by the bankruptcy court? If it's able to be sold by the bankruptcy court, the proceeds from those sales go to pay off your creditors. If it's not something that's subject to being sold by the bankruptcy court, that's your own personal property. That's exempt and it's not part of the bankruptcy estate.
One thing to keep in mind, property that is part of the bankruptcy estate cannot be sold. When you file for bankruptcy, you are technically not the owner of the property. The owner of the property is the bankruptcy estate, which is how the bankruptcy court has the power to sell that property and obtain proceeds to pay off creditors in exchange for your debts being wiped out.
If you have any questions about whether or not something can be sold during the course of a bankruptcy, please meet with an experienced bankruptcy attorney who will be able to give you some sound advice as to whether or not you really want to sell that property while the bankruptcy case is pending. If you were to sell something that is part of the bankruptcy estate without court permission or court authority, it could cause some big problems for your bankruptcy case and undo everything that you're trying to accomplish with your case.
Again, this is Matt McArthur, advising you to please speak with a bankruptcy attorney before you think about selling any property during your case. I'll see you next time.