What Does It Mean When The Bankruptcy Trustee Issues A Notice Of Possible Dividends In My Bankruptcy Case?
In broad terms, there are two kinds of Chapter 7 bankruptcy cases: “no asset” and “asset”. A no asset case is when a debtor owns no property that is not covered by Colorado bankruptcy exemptions. In other words, all of the debtor’s property is protected and the bankruptcy trustee can’t take any of his property to give to his creditors. Most Chapter 7 bankruptcy cases are no asset cases.
Asset cases arise when a debtor owns property that is not protected by Colorado bankruptcy exemptions. For example, in Colorado one of the most common non-exempt (unprotected) assets is a debtor’s tax returns. If the trustee forces you to turn over your tax return, they will open an asset case. At that point they will send all of the creditors that you listed in your petition a Notice of Possible Dividends to let them know that there are assets available for distribution. If any creditor wants a portion of this distribution, it will have to file a Proof of Claim. If it doesn’t file a Proof of Claim, it won’t receive any money. You should also know that if you forget to list a creditor when you have an asset case, that creditor’s debt may no be discharged or eliminated when the court closes your case.
Our job is to make sure that you understand before you file whether or not you will have to pay anything to the bankruptcy trustee when you file your petition. We can make sure that there aren’t any surprises down the road and give you advice on how to avoid having to pay anything when you file.
Schedule A Free Bankruptcy Consultation With A Colorado Bankruptcy Lawyer To See If Your Property Is Protected
If you have any questions about whether your creditors will get any of your assets when you file bankruptcy, we hope you’ll come in for a free, no-obligation bankruptcy consultation. One of our primary objectives is to make sure you make it through the bankruptcy process with all of your assets and without having to pay the trustee or your creditors. You can schedule your consultation with an experienced bankruptcy lawyer by using our online scheduling system or by calling 303.331.3403.