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Will My Home Be Searched When Filing Bankruptcy?

Many people fear that a bankruptcy trustee will search their house or apartment during bankruptcy.  Many believe that a cataloging of property or an auction takes place during every bankruptcy case.  In reality, these things virtually never happen in bankruptcy.  In Indiana, no search or other intrusion into your household is likely to happen during bankruptcy.   This article explains why such personal intrusions are uncommon and unnecessary in most bankruptcy cases.

The Petition Already Lists All Property

Your petition for bankruptcy already lists all of your property and financial information.  When you file for bankruptcy, you sign under penalty of perjury that all the information is correct.  In addition, certain verifying documents are required to be presented to the bankruptcy court and trustee.   The trustee can review these documents and do their own due diligence searches if they desire.  With all this information at hand, it is rare that the trustee will need to do any personal examination of your property.

Indiana Bankruptcy Exemptions Protect Most People’s Property

In Indiana, the bankruptcy exemptions protect the vast majority of bankruptcy filer’s property in entirety.  Using these exemptions, you were allowed to keep over $10,000 of personal property per filer.  You are also allowed to keep almost $20,000 in residential real estate per filer.   This protects the vast majority of property held on most cases. It also makes excessive searches of property completely unnecessary.

The Trustee Will Not Do Anything That Does Not Benefit the Creditors

Excessive searches or research almost never proves to produce any more funds for creditors in bankruptcy.  Therefore, the  trustee will not waste their resources on such unnecessary matters.  In addition, the bankruptcy system is designed to be efficient and effective. Such searches or intrusions would be over burdensome and undesirable within the bankruptcy system.  Although the trustee has wide latitude in researching and cataloging assets, such actions are only necessary and a very limited amount of high asset Bankruptcy cases.