Will filing bankruptcy protect the assets I have left? 15 Answers as of January 26, 2012

Three years ago I owned a company with 2 others and the company folded with the economy. We didn't declare bankruptcy. We had a company credit card with $19,000 balance which we couldn't pay. The partner that originally opened that account asked that the bills be forwarded to him. I found out last fall that he defaulted on that card, was sued and eventually paid the full amount. I found this out when I was served notice that he was going to sue me and the other partner. My other partner had already declared bankruptcy and so they dropped the claim against him. I don't have a defense - it was partially my debt - but have no money to pay. I was then served with the lawsuit but cannot afford an attorney. Also, I was going to be out of town at the time of the court appearance and could not be there. I talked to an attorney who told me a default judgement would probably be filed against me but since I don't have any money they could never collect. When I got back I received a call from the opposing attorney who said the judge issued an order which he would send to me. The order was for a "prove-up" meeting (don't know what that is) but I didn't get it until the day of the meeting (3 weeks after I talked to him). Since I also missed that meeting I emailed his attorney to find out what happens next and got no response. Today I received a Citation to Discover Assets. Evidently because I missed that meeting the judge has ordered me to pay $12,000. I don't have a regular job but do get paid for occasional consulting work. I don't own a home or have savings or stock or anything else of value. But I am married, have two 10yr old cars and a house full of furniture. The citation indicates they intend to take everything I own to satisfy the debt. My question is if I file for bankruptcy will this stop them from taking everything I own?

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J.M. Cook, P.A. | J.M. Cook

Yes, but the same exemptions available in bankruptcy are available to you under the NC Constitution. So you don't have to file to protect your assets, but you do have to stop defaulting. Not answering is never the right answer. You should have received a motion to claim exemptions from the Sheriff. If not, go to the civil county clerk and ask for the form and fill it out and file it with the Clerk and send a copy to the opposing Atty.

Answer Applies to: North Carolina

Replied: 1/26/2012

The Law Office of Darren Aronow, PC | Darren Aronow

Yes, your furniture and probably your cars (assuming there is little equity in them) will all be protected and the entire debt to your ex partner will be dischargeable.

Answer Applies to: New York

Replied: 1/26/2012

Ashman Law Office | Glen Edward Ashman

You have made mistake after mistake in not hiring a lawyer until now. You now have a legal emergency and must see one today. Absent a bankruptcy, your irregular income, your bank accounts, your cars and your assets can be seized. Look at whether you should file to stop this.

Answer Applies to: Georgia

Replied: 1/26/2012

Law Office of Louis S. Haskell | Louis Haskell

Filing will stop the state court from bothering you any more. In Massachusetts, and in any state that uses federal exemptions, and probably every other state as well, you should be able to protect your assets. Your question implies that your cars are of limited value. I am assuming your furniture is nothing special and you have no other claims or assets. I am also assuming that you consulting income and your wife's income is not "above median". You need to consult an attorney, but I do not see why you should have any problem with losing assets in bankruptcy. The bankruptcy will stop the state court action dead in its tracks.

Answer Applies to: Massachusetts

Replied: 1/26/2012

AyerHoffman, LLP | David C. Ayer

Upon filing your bankruptcy petition all attempts to collect debts from you stop. Upon receiving a discharge in bankruptcy, your obligation to pay on most debts, particularly those with unsecured creditors (credit cards), is gone. Depending on the state in which you live, the way your house is titled, and the way your cars are titled, you may very well walk away from the bankruptcy with your current assets intact. You should consult with a bankruptcy attorney in your state to determine which asset exemptions apply to you and whether a bankruptcy is the best solution for your problems.

Answer Applies to: Massachusetts

Replied: 1/25/2012

The Smalley Law Firm, LLC | Cary Smalley

Filing for bankruptcy generally protects all assets from creditors for most individuals. Your household goods and one car per individual would be exempt and could not be taken in the bankruptcy. Additionally, bankruptcy provides an automatic stay against collection efforts.

Answer Applies to: Kansas

Replied: 1/25/2012

Cohen & Kendziorra, P.A. | Robert S. Cohen

Yes, bankruptcy will stop all collection efforts.

Answer Applies to: Florida

Replied: 1/25/2012

Bankruptcy Law office of Bill Rubendall | William M. Rubendall

When you file bankruptcy you list all your assets and debts. Most ordinary possessions are exempt so you can keep them. If you have been ordered by the judge to appear in court you must do so or else be in contempt of court. However, if you file bankruptcy contact the opposing attorney and ask that the court hearing be cancelled. If you must appear bring proof of your bankruptcy filing.

Answer Applies to: California

Replied: 1/25/2012

Law Offices of Robert P. Taylor | Robert P. Taylor

I would need to know a few other things, but from what you said so far, sounds like you could file a Chapter 7, wipe out all these debts and keep everything.

Answer Applies to: California

Replied: 1/25/2012

Indianapolis Bankruptcy Law Office of Eric C. Lewis | Eric Lewis

Bankruptcy would stop a lawsuit of this type and enable you to keep all exempt property under applicable state law.

Answer Applies to: Indiana

Replied: 1/25/2012

Lewis Adams and Associates | Lewis P. Adams

The short answer is yes. Every state has exemptions that protect personal property and the value of most older cars. What the bankruptcy will do will eliminate the lawsuit and its effects.

Answer Applies to: Utah

Replied: 1/25/2012

Law Office of Lynnmarie A. Johnson | Lynnmarie Johnson

Important Lesson: Do not ignore letters or notices from attorneys or Courts. The meeting you didn't go to was so that you could show that you had no assets and no way to pay the judgment. Since you didn't go, the judge probably issued an order that said they could go after whatever they can find. However, from what you are saying are your assets, a bankruptcy can stop them, but you had better get going on it right away. An attorney could more accurately look at the papers that you have received, your consulting income, and anything else that might be pertinent to see if a bankruptcy is really necessary, but do not put this off.

Answer Applies to: Michigan

Replied: 1/25/2012

The Law Offices of Kristy Qiu | Mengjun Qiu

Homestead is always protected, so is any income from SSI sources. Aside from that everything else is fair game, including your cars and the furniture and what not. If you transfer everything to your wife's name right now it will be bad faith, don't do it. If you're considering bankruptcy, all unsecured debts (assuming that they do not meet the exception to discharge) will be discharged. Your cars will mostly likely be protected in bankruptcy if their current value fit in the allowed exemption amount in bankruptcy. Bankruptcy won't affect your wife or your kids, it's personal.

Answer Applies to: Florida

Replied: 1/25/2012