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You Can Keep It ALL When You File a Chapter 7 Bankruptcy in Arizona!

By Joseph McDaniel, Esq.

You just have to buy it back!

No biggie.

It becomes a negotiation issue, and only happens in about three per cent of all Chapter 7 Bankruptcy Cases filed in Arizona, because the other ninety-seven per cent are "no-asset" cases, which means that all of the assets in the case were exempt, over-encumbered, or otherwise worthless, or subject to the "secret exemption" that I've discussed at length elsewhere in this bankruptcy blog. 

But if you have something that has sentimental value to you, and you can't sell it pre-petition to pay a lawyer and buy food, fuel and provisions, and make a mortgage payment or two, and you really, really want to keep it, you can just buy it back from the trustee!

Now, remember that it sounds easy, but it is a time-consuming task, and there is no absolute certainty about buying from an Arizona bankruptcy trustee these days, because your offer becomes the first step in a process which involves (typically) a quickie bankruptcy auction.

You'll probably want to appear at that auction in person to protect your bid.

Otherwise, somebody might outbid you for the antique brass hookah, and then where would you be?

p.s. in a large case, involving a doctor or a lawyer or a c.p.a., I much prefer the "Global Settlement" approach, but it takes two to Tango in a bankruptcy case, and sometimes a trustee will insist on a piece-by-piece buy-back approach.

And in some cases, that's a pain in the neck!

Full post as published by Arizona Bankruptcy Attorney Blog on December 30, 2010 (boomark / email).