This is a serious and stressful question faced by many who think they may have to file for bankruptcy protection, and I am happy to announce, generally, the answer is no.  Of course, there is always the random case where just about everything goes wrong and the Trustee (that is the person who administers your case) does show up…. but generally that does not happen, especially if you have an experienced bankruptcy attorney advising you (and…. you are following his or her advice) . 

The law is laid out so that it is fair for EVERYONE, and that means your creditors AND YOU.  It is not fair, I think you would agree, to allow you to keep all of your “pretty stuff” – i.e. the things you bought while the buying was good, and not give anything to your creditors.  Of course, it would be equally unfair to take those items from you that you need to remain a functioning and well-adjusted member of society.  It is NOT the goal to put you on the ‘poor house’ and believe it or not, 9 out of 10 of  my clients don’t have any “pretty stuff” that the law does not already protect.

The laws that protect your belongings are called exemptions – they are exempted from collection.  When you file for bankruptcy relief in Arizona, the Arizona Exemptions apply, and this, is not a bad thing, either.  Arizona has some great exemptions, and as I said – most of my clients do not own anything that is not protected by Arizona Exemptions. 

The key here is, as with most things in bankruptcy law, FULL DISCLOSURE.  This means that everything you own must be listed.  There are no exceptions.  It is so important, I feel I have to repeat it: everything you own must be listed!  It is not your call whether something is important or valuable – the trustee will make that call.   Furthermore, if the trustee finds out about an asset that you have hidden later, you not only committed a felony by hiding it, but you may also have cost yourself the benefit of a discharge.

Speak candidly to your attorney about everything you own.  There are ways to protect assets – and as with everything – there is a right way and a wrong way of going about it.  Bottom line, if you do everything the way it should be done, you are upfront about everything with your attorney, and you follow the advice your attorney gives you, no one will come to your house and take your stuff.

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