Every Country in the World has a Bankruptcy Law. These laws are as necessary as Civil Laws and Criminal Laws. Without Bankruptcy Laws there would be a damper on the economy caused by people who do not work to their full potential for fear of creditors. A Bankruptcy gives a person a “fresh start” so that he can resume working to his full potential free from the fear that all his excess wages and property will be taken by Creditors.
In order to eliminate debts in a bankruptcy you must file a list of all your property and all your debts. You will be allowed to keep (“exempt”) the property that you need for a “fresh start” which means that most people will not have to transfer any property to the Bankruptcy Trustee to be sold for the benefit of their Creditors. However if you own an expensive home with a great deal of equity or an expensive car or other real property with substantial equity then you will have to pay the Trustee whatever value you own above the secured debt plus the exempt amount. Of course, no one should file bankruptcy without knowing the value of their “non exempt” property because if there is “non exempt” property you cannot dismiss your case without paying the Trustee even though you filed the bankruptcy voluntarily.
Whether it is collecting non exempt property from the Debtor or recovering money owed to the Debtor or money or property transferred by Debtor prior to the Bankruptcy for less than fair value (ie a “fraudulent transfer”) or which enabled one of his Creditors to receive more than his fair share of the Debtor's non exempt assets the Trustee's job is to collect as much property as possible to pay a “dividend” to Creditors. e.g. 10 cents on the dollar. It sounds scary, but the fact is that most bankruptcies go through without the Trustee or anyone else trying to collect money or property or trying to bar a discharge.
For a very small number of bankruptcies things can get very complicated. Trustee's can sue debtors and/or third parties. Debtors can sue the Trustee or third parties. Creditors can sue each other and/or the Debtor and/or the Trustee. Many aspects of the case are determined by State Law; however other aspects of the case are determined by Federal Law. The location of property and where the Debtor has lived in the past can all affect the outcome of the case. Case Law, Statutory Law and even the “Common Law” can be involved.
This is why every Adversary Proceeding should be evaluated by an experienced attorney; often things are not what they appear to be and a case which at first glance seems hopeless may not be not hopeless at all. Most of the time wrongdoing on the part of the Defendant will not cause him/her to lose the Adversary Proceeding. In addition many cases can be won on “technicalities”. Our office will not charge you for a consultation or for an oral and written evaluation.