How to keep property
If you are filing bankruptcy in Kentucky, your attorney must have an accurate record of your debts and property. Don’t leave property or debts out because you intend to pay it or you co-own property.
Fraud in not listing, transferring property and income tax debt
You can only exempt and keep property that is in your name so you can start life over. You can’t exempt property that belongs to another person. If you transfer property to another person for less than what it is worth creates a fraudulent or preferential transfer. The Trustee in a Chapter 7 Bankruptcy can then recover the property or sue the person you gave the property to for the value of the item. By recovering fraudulent transfers the Trustee can then sell it for the benefit of creditors. Even if you could have exempted it, if you don’t list it or gave it away, the trustee can get it.
Keep the estimate of your property value low but honest especially if you are bankrupting tax debts. Normally household goods are listed at what they would bring in a yard sale of auction. Cars are valued in the petition at private party sale or trade in values. Homes are listed at what they would have brought if sold within 30-60 days. If you owe income taxes they may have a lien on all you own. If you have a high value on household goods and other property you increase the amount you have to repay to a secured or income tax debt.
Listing Debts and Filing bankruptcy in Kentucky
A Chapter 7 or 13 should include the debt:
- address this is the most important
- account number
- notation of what the security if any
- purpose of the debt
- notation of who owes the debt husband, wife, joint, and co-maker
After filing a Chapter 7 or 13 some creditors check your bankruptcy. Some creditors automatically obtain your filing information electronically seconds after filing bankruptcy. If a creditor is not listed they will continue to attempt collections. If you are later applying for a mortgage and fail to list a debt, your mortgage company may make you pay the debt or wait months for your home while you reopen and add the debt to your case.
Bankruptcy law requires you to list all your debts whether or not you wish to repay the debt. You can keep a property by reaffirming or voluntarily paying it but you must list all assets and liabilities in your Bankruptcy petition. As a lawyer, we can’t overemphasize the importance of filing on all of your debts and listing the assets for accuracy. For your benefit we have an online process that helps you and provide you with a source for getting a free credit report. Listing all your debts even if you cosigned will save you time, trouble and money. You may want to file online so your petition will be more accurate and appointment will take less time.
The failure to list property means you have no right to keep it from the trustee who may then take it. You can use an exemption to keep property you list. If the property is titled in your name then you own it. Often Mom and Dad put you on the bank account, car or home to help manage it. But even if you meant the funds, car or home to belong to Mom and Dad you own it if you are on the title.
Don’t fail to tell your attorney about it. Always list the property and tell your attorney so you can list it and use an exemption to keep it. There are many different exemptions you can use to keep property. We only list the most common 7-10 in the manual. Kentucky uses the federal exemptions. But when you fail to list, transfer or hide property you lose the right to use exemptions to keep it. Filing for bankruptcy in Kentucky is not an easy decision or process. Give us a call for a detailed consultation so we can help you avoid the traps and properly plan your petition.