ATVs, boats, gun collections, etc. are typically not exempt assets and are not protected in bankruptcy. That means that in a Chapter 7 bankruptcy the trustee has the ability to collect these assets and sell them in order to repay your creditors. However, it is extremely rare for people who file for bankruptcy to lose their televisions and other basic property.

Often ATVs and other toys are secured with loans or credit cards and do not have equity. You can usually keep these items in a Chapter 7 if you continue to make the payments to the person owed. Sometimes we can even reduce your payments to the actual value of the goods, which is usually less than what is owed. Even if your TV and other nonexempt assets are fully paid for, the trustee will not take them if he/she determines that the costs of examining, collecting, selling, and distributing the proceeds exceeds the equity in the items. We have dealt with the bankruptcy trustees extensively and during your Free Consultation we will discuss whether the trustee is likely to go after assets in your situation.

DO NOT transfer these assets for less than fair market value because you think that you may lose them in bankruptcy!

It is very important to talk to a knowledgeable and experienced bankruptcy attorney about exemption planning to make sure you maximize your assets and avoid Fraudulent Transfers and Preferences. If the situation is handled incorrectly you may cost yourself or your loved ones thousands of dollars and also risk losing the forgiveness of your debts. Talk to an experienced bankruptcy attorney before transferring any property or paying money to family.

Posted in: Frequently Asked Bankruptcy Questions