There may be debtors in Pennsylvania who can benefit from understanding more about what creditors can recover after a Chapter 7 bankruptcy filing is approved. Smaller items, such as clothes, furniture and moderately priced jewelry may not be collected from debtors approved for Chapter 7 bankruptcy. The trustee assigned to the bankruptcy case is typically concerned with issues related to the transfer of assets, cash advances, potential inheritances, pending lawsuits or delaying a foreclosure.
Debtors receiving large cash advances after filing bankruptcy may be suspected of fraud and required to repay the some of the outstanding balance or the entirety of the advance. Bankruptcy courts may consider debt owed to family members as legally binding as any outstanding balance held by creditors. Debtors are required to disclose any pending lawsuits because they are often considered to be assets. The trustee appointed to a debtor's case has first rights to review potential litigation, even if they have no actual interest in the lawsuit.
Debtors may not be able to protect assets by transferring them, and doing so may expose the property to increased risk. Lawyers might not be able to continue providing protection for the assets once. However, the specific parameters are governed by the residing state's unique bankruptcy laws. Courts discourage estate owners from transferring assets to others in an attempt to divest bad debt and retain valuable assets. Transferring assets in order to protect them from liquidation before a bankruptcy filing is not a reasonable strategy.
Anyone who needs help with managing debt owed to creditors may benefit from discussing bankruptcy options with legal counsel. Lawyers might be prepared to help debtors gather the documentation required for filing bankruptcy in the appropriate jurisdiction. Legal counsel may be able to protect debtors from wage garnishments and creditor harassment while the Chapter 7 bankruptcy process is underway.