Bankruptcy is an invaluable tool for those who are facing mounting debts, but the advantages of a fresh start have to be weighed against the loss of the assets that will need to be sacrificed to the bankruptcy trustee for sale. As hard as it is to consider giving up a home, a vehicle, cherished jewelry or heirlooms, those things pale in comparison to the idea of having to give up a family pet. Still, under bankruptcy rules any animals that are owned need to be listed as assets — even your beloved dog, cat, bird, or snake

The good news is that most animals have little value in a bankruptcy proceeding, and even if your animal has a value, it is exceedingly rare for a bankruptcy trustee to do anything but exempt what most Americans view as family members. One thing to keep in mind is that when trustees assume control of an asset, they do so with the idea of selling it – unless your animal is earning large sums of money, the cost and work involved in assuming ownership would far outweigh the value that would be realized by selling it. You still need to list them as an asset but are unlikely to have to give it up.

Though you are unlikely to have to give up your pet, there are a few elements that may complicate this issue. If, for example, you earn income from breeding your animal, through their talent or some other service, you need to include that income on your bankruptcy statements in addition to stating their value.  It is also important to remember that a pet can represent a significant expense, especially if they are older and begin needing constant medical care. These expenses will need to be listed on your filing as well, and it is conceivable that a trustee would look askance at offsetting those costs against what is owed to creditors.  Additionally, if you chose to finance the purchase of an expensive animal, the creditor likely has the legal right to use your pet as collateral and repossess it.

As scary as all of these considerations are, the reality is that bankruptcy is meant to give you and your family a fresh start – and your pet is part of your family. Trustees are aware of this and do not want to take pets away from their owners. Contact our team today to discuss this and other aspects of bankruptcy!

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