What will happen to my properties after filing bankruptcy?

By Atty. Crispin Caday Lozano


When you file your bankruptcy papers, a bankruptcy estate is created that is administered by the trustee designated by the U.S. Department of Justice.  The trustee is the representative of all your creditors in the process. While the bankruptcy process is in progress, he takes control of all the property in your bankruptcy estate.  However, the trustee won’t actually take physical control of the property.  Most, if not all, of your property will be exempt, which means the trustee will return it to your legal possession after your bankruptcy is closed.  If you have any questions about dealing with property after you file, ask a bankruptcy attorney.

Q. What should I do with my property while the bankruptcy case is pending?

A. While your bankruptcy is pending, do not throw out, give away, sell, or otherwise dispose of the property you owned as of your filing date – unless and until the bankruptcy trustee says otherwise. Even if all of your property is exempt, you are expected to hold on to it, in case the trustee or a creditor challenges your exemption claims.

Q. I have a piece of land that is not allowed in my total exemption. What will I do with it?

A. If some of your property is non-exempt, the trustee may ask you to turn it over. Or, the trustee may decide that the property is worth too little to bother with and abandon it.  Typically, the trustee doesn’t let you know that property is abandoned, but once you receive your discharge, the property is deemed abandoned.

Q. Can I spend the money that I included in my filing as I declared in Schedule B?

A. You are allowed to spend cash you had when you filed and you declared in Schedule B to make day-to-day purchases for necessities such as groceries, personal effects, and clothing.  Just make sure you can account for what happened to the cash.

If you have a huge purchases reflected in your bank statements, be sure to account and explain it to your trustee in case you are asked for it.

Q. Who owns the income I earned and the property I acquired after filing bankruptcy?

A. In Chapter 7 cases, with few exceptions, the trustee has no claim to property you acquire or income you earn after you file. You are free to spend it as you please.  The exceptions are: property from an insurance settlement agreement, or inheritance that you become entitled to receive within 180 days after your filing date.

Note:     This is not a legal advice.  Our office has been helping clients in bankruptcy since June1999.


Bankruptcy Basics

  • Bankruptcy will actually improve your credit within one year because your unsecured debts are discharged. Although the bankruptcy will be in your records for 10 years, not filing bankruptcy will make your credit even worse until most your debts are paid.
  • If you are being sued by your creditors, most money judgment can be eliminated in bankruptcy.
  • Collection actions continue and you can be sued if you are in debt settlement.
  • Chapter 7 will eliminate all unsecured debts. If you are near retirement age, you must eliminate most of your debts.
  • Bankruptcy will stop foreclosure actions. If your trustee sale date is 10 days before, you can still file for bankruptcy.
  • If your salary is being garnished, you have a court case about debts or you are being harassed by creditors, bankruptcy can stop garnishment, court cases, harassing creditors and eliminate the debt.
  • Bankruptcy is cheaper, faster and safer than debt settlement which has no guaranteed success.
  • Preserve your health, eliminate stress and live a happy life by eliminating your debts which is the root of all problems.


Crispin Caday Lozano, Esq. is an active member of the State Bar of California, the American Immigration Lawyers Association and San Francisco Trial Lawyers Association.  He specializes in immigration law, bankruptcy and personal injury.  For free consultation email or call (info@ccllaw.net / 1-877-456-9266)


Toll Free 1-877-4LOZANO for free consultation or Schedule an Appointment