Your bankruptcy case doesn’t just include your debt and income. In order for the court trustee to fully evaluate your case and make discharge decisions, he or she also needs to know about your property and assets. For real property, the trustee needs to know some details about your property and its ownership, and this information goes on Schedule A/B of your paperwork. We can work on this form together so that each item is listed correctly.
Types of Property
When listing your real property, you’ll need to include not only the property you own, but also property you could potentially own or have an interest in; basically anything that has your name on it in any capacity. Listing most property is straightforward because it is “fee simple,” meaning you either own it or are making payments on it, whether it is only in your name or you own it jointly. You must have the legal right to sell or modify the home or other property.
Some property is only owned during your lifetime and may not be sold or passed on to anyone else by you during your lifetime. This would be called “life estate” property, and it’s usually part of a trust when someone leaves property to their spouse. In the trust, it states that upon the surviving spouse’s death, the property would be transferred to someone else (usually the couple’s children.)
If there is property willed to you via an irrevocable trust, this property is considered a “future interest.” These types of trusts may not be changed, so the property will definitely be yours at some point. The property is also “contingent” since some requirement must be met before you take possession of the property. If the property is part of a will that can be changed at any time, it would not be included in this form.
If you are a lien holder on a property, you have an interest in the property. Additionally, if you have permission to use a property via an easement, you’re an “easement holder.” While you may not own property that you have “power of appointment” for, you do have the right to sell or transfer part of someone else’s property. If you’re under a real estate contract but haven’t taken ownership of the property yet, you still have a “beneficial interest” in it. All of this property needs to be included in your paperwork.
Leave the Details to Me
All of this legal terminology can be confusing, but working with an experienced bankruptcy attorney takes a lot of the burden off your shoulders. Part of my job is to educate you about the bankruptcy process and your rights and responsibilities along the way, while preparing you for a more secure financial future. We’ll work together to get your case filed correctly and resolved quickly.