Category Archives: Joint Property

What is a Contingent Claim and Can I Exempt One in Chapter 7 or Chapter 13 Bankruptcy?

All assets must be disclosed in your bankruptcy petition—even assets you may not receive or which may not have value until some other event occurs in the future. Such assets are “contingent,” but they are still assets.

Click here to read more about contingent claims in bankruptcy on the new Michigan Bankruptcy Blog of Michigan Bankruptcy Attorneys The Hilla Law Firm, PLLC.

If you are a southeast Michigan resident considering filing for bankruptcy, please feel free to contact me at (866) 674-2317 or john@hillalaw.com to schedule a free, initial consultation.

Should I Transfer Property out of My Name before Filing for Bankruptcy?

It seems like an easy fix, when making attempts to protect assets from creditors prior to deciding to file for bankruptcy to move those assets from your name to a son or daughter or sibling or parent. Often, when people have quit-claimed a home to someone else to protect it from a creditor, they still do not realize, at that point, that they may end up filing for bankruptcy.

This can be a very bad idea.

To read more about transferring property and bankruptcy, click here to read our full post on this topic on the new Michigan Bankruptcy Blog of The Hilla Law Firm, PLLC.

If you are a southeast Michigan resident and are considering filing for bankruptcy, please contact me at (866) 674-2317 or john@hillalaw.com to schedule a free, initial consultation.

Can I Keep My Jewelry if I File for Bankruptcy?

Whether or not you are able to retain jewelry or other personal property in bankruptcy depends greatly upon the value of the property and whether you are filing Chapter 7 or Chapter 13 bankruptcy.

To read more about jewelry and the retention of property in bankruptcy, click here to read our full article on this subject on the new Michigan bankruptcy blog of The Hilla Law Firm, PLLC.

If you are a southeast Michigan resident and are considering filing for bankruptcy, please contact us at (866) 674-2317 or john@hillalaw.com to schedule a free, initial consultation.

What Happens If I Declare Bankruptcy and am Listed as a Joint Account-Holder on Someone Else’s Bank Account?

Several times in recent weeks, individuals I’ve counseled wishing to declare bankruptcy have revealed to me that, in addition to their personal bank accounts, they are also listed as “joint holders” on someone else’s bank accounts, such as an elderly relative, sibling, or friend. (For the sake of clarity, I am not discussing joint bank accounts between married individuals in this post.) Particularly in the case of elderly parents, this is often for convenience or estate-planning purposes, as the parent anticipates the possibility that, at some point, they may be physically unable to gain access to their needed funds. In such cases, the jointly named potential bankruptcy filer may have contributed little or no funds to the account at all; they are simply listed as a user in case their parent needs assistance with finance-related daily activities. They own 0% of the funds in the accounts, yet they are listed as an “owner” of the account for all general purposes. This raises a serious question when they need financial assistance themselves, in the form of bankruptcy: will those funds be protected from the court-appointed  bankruptcy trustee, whose job it is to liquidate all available assets for the benefit of the creditors whose debts are to be discharged in the bankruptcy?

In Michigan, where I practice, this question is framed with a point of state law: MCL 487.703  holds that there is a presumption of joint ownership of any funds in a bank account with joint users listed in this way. Although the bankruptcy process itself is governed by Federal law, certain underlying considerations in the process are dependent upon the laws of the state in which the bankruptcy is being filed. This is such a consideration.

What that means, then, is that, in Michigan, if you are listed on someone’s bank account and that account has, for example, $10,000 of that person’s money in it, Michigan state law (and the Eastern and Western Federal District Courts along with it) will presume that $5,000 of that money belongs to you.

The potential effects of that presumption are serious and should certainly be taken into consideration when deciding to file bankruptcy. However, the presumption of joint ownership that I’ve described is rebuttable, which means that, if an individual has evidence that proves that they don’t own the funds in the account, the bankruptcy court should leave the funds unaffected.

Depending on the amount of money involved (bankruptcy trustees earn a percentage of the funds liquidated for creditors’ benefit), this may be easier to accomplish or more difficult to accomplish. Depending on the specifics of each individual situation, there are different ways of listing the joint accounts in the bankruptcy petition to foreclose the possibility that the trustee will become interested in liquidating an account that does not actually belong to the filing debtor. It may even be preferable to have the accounts closed prior to the filing of the bankruptcy, though this is a delicate operation and should certainly not be considered if any percentage of the funds do indeed belong to the filing debtor.

One thing is clear, in any case: all such accounts should be disclosed to your bankruptcy attorney who will, in turn, make the correct decision as to how best to disclose and list them in the bankruptcy petition. Such situations are delicate but are also easily managed by a knowledgeable attorney. Complications such as this often trip up individuals opting to file for bankruptcy without the use of an attorney and are a strong example of how something that seems simple and obvious can have serious ramifications when attempted without qualified legal advice.

If you are a southeast Michigan resident and are considering filing for bankruptcy, please contact me at (866) 674-2317 or john@hillalaw.com to schedule a free, initial consultation.