What Happens to Asset Money That Is Not Claimed in a Chapter 7 Bankruptcy Case?

Assets not included in a bankruptcy case can cause the debtor to be denied the discharge.

When filing for bankruptcy, it is of the utmost importance for the debtor to include assets from all areas of life. Anything that generates income, will generate income in the future or anything of value should be considered. If after the initial filing a debtor finds additional assets not included, they must report it to the court immediately.

Case Dismissal

Although ultimately the decision is up to the judge, if the asset appears to be purposely withheld, the case can be dismissed and the bankruptcy will not be granted.

Inclusion of Asset

If the asset is submitted after the case is initially filed, and it was not held purposefully, it may be included in the decision of the case.

Chapter 13

If the asset increases the overall income substantially, there may be reason for Chapter 7 to be dismissed and Chapter 13 may be an option. Chapter 7 has very specific parameters with strict limits of income.

References

• McDonald Law Offices FAQ: Property Lost in Bankruptcy
• Lawyers: Bankruptcy FAQ