“I can’t file bankruptcy. I heard that a trustee will come into my home and take what he wants.”
Is there anything more frightening than this sentence? It isn’t true, of course, but the fear is real.
Yes, there is a remote one-in-a-bazillion chance that a trustee can get an order allowing seizure of unprotected property, but note how this sentence compares with the stated fear. A court order is required, and only unprotected assets may be taken. This was the ruling of Youngman v Bursztyn (In re Bursztyn), 366 BR 353 (Bankr DNJ 2007). It held that the Fourth Amendment’s protection from unreasonable searches applies in bankruptcy, but there was a lower privacy expectation in bankruptcy where a debtor’s documents contain disclosure of all assets in great detail and under penalties of perjury. In that case, the debtor had recently been held by her divorce court judge to have lied about her possession of $250,000 of jewelry which wasn’t disclosed in her bankruptcy papers. This gave the bankruptcy judge reason to allow the trustee’s search (with the assistance of the U.S. Marshals).
Careful pre-filing planning should lead to protection of all your assets. Please consult with the trusted Bankruptcy Law Network attorney of your choice.
Latest posts by Jed Berliner, Western & Central Massachusetts Consumer Lawyer (see all)
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Last modified: February 9, 2013