The decision to file for bankruptcy is not easy. However, for many people, bankruptcy is ultimately the best option. There are many benefits to filing for bankruptcy, the primary one being a clean financial slate. However, there are also downsides to filing for bankruptcy, including the possibility of losing some of your property. And although you may consider your horse to be a part of your family, the court considers it property. Therefore, whether you can keep your horse after filing for bankruptcy depends on the type of bankruptcy you choose. In this article, we discuss bankruptcy and its effect on your horse.
Chapter 7 Bankruptcy
Chapter 7 bankruptcy, which is also often called a liquidation bankruptcy, requires the sale of a debtor’s nonexempt property to pay back his or her creditors. However, Chapter 7 bankruptcy does allow the debtor to keep some exempt assets and possessions. This type of bankruptcy essentially amounts to a liquidation of most of the debtor’s assets. Exemptions, which allow debtors to keep some, but not all, assets are established by state law. A debtor’s non-exempt property in Chapter 7 bankruptcy is surrendered to a court-appointed trustee. The court-appointed trustee then sells the assets and distributes the funds from the sale to the debtor’s creditors. All states consider horses to be personal property. Unfortunately, horses generally are not considered exempt property under Chapter 7 bankruptcy.
Chapter 13 Bankruptcy
Chapter 13 bankruptcy, which is also known as a wage earner’s plan, enables debtors who receive regular income to enter a plan to repay part or all of their debts. Chapter 13 bankruptcy permits debtors to keep both non-exempt property and exempt property pursuant to a payment plan that is approved by the court. Although there are specific approval requirements, Chapter 13 bankruptcy generally allows a debtor to keep his or her horse.
Chapter 11 Bankruptcy
Finally, Chapter 11 bankruptcy involves the reorganization of a debtor’s assets, debts, and business affairs. Businesses, including those in the equestrian field, may be eligible to file for Chapter 11 bankruptcy. Chapter 11 bankruptcy is essentially a structural and reorganization plan for a business that is suffering financial problems. Depending on the nature of the business that files for Chapter 11 bankruptcy, the sale of some horses may be required, while others may be kept for the operation of the business. However, every bankruptcy is different, so it’s imperative to review your case with an experienced attorney to determine the effect that it may have on your ability to keep your horse.
Contact a Wellington Equine Law Lawyer
If you are a horse owner in the state of Florida, and you are considering filing for bankruptcy, you need an experienced equine law lawyer on your side. An experienced Wellington attorney will provide you with legal guidance on how bankruptcy may affect your ability to maintain possession of your horse. Please contact us to schedule an initial consultation with an experienced equine law lawyer.