If you have a storage unit, you may need to know a few things before you file for bankruptcy. What will happen to your unit? Usually, your storage unit will not be taken or auctioned off during bankruptcy. The contents of your unit must, however, be included within the property section of your bankruptcy petition.
Your unit will usually not be taken or auctioned off during bankruptcy. Your bankruptcy exemptions will usually cover the entirety of the contents. Storage units usually contain household goods and personal memorabilia. These items are usually not valued very high during bankruptcy. Your bankruptcy protections (exemptions) will cover the contents in most cases.
Rarely, a bankruptcy filer may place exceptionally high-value property in a storage unit. Examples of high-value storage unit possessions would be things such as art, collectibles, high-value coins, and antiques. Large amounts of such high-value property can cause you to exceed your exemptions. This would allow the bankruptcy trustee to either take some property to sell or force you to settle out the difference. This is extremely rare, however, because most storage units have normal contents that are safe during bankruptcy.
The contents of your storage unit must be included in your bankruptcy petition. Remember, that you need to add all the property in your home and the unit together when you list the value of your property in a bankruptcy case. All forms of property must be disclosed in full in your bankruptcy petition. In addition, any property held by other people for you or in safety deposit boxes must also be listed. Bankruptcy is about full disclosure. It is important that all of your property is accounted for in the bankruptcy petition.
Another thing that can easily be overlooked is making arrangements to pay your storage unit bill. You will not be able to discharge your debt for the unit without potential consequences. If you do not pay the debt for your unit, you will risk losing the property in your storage unit. The storage unit company will likely still be able to auction off your contents eventually even if you filed for bankruptcy.
For more information on bankruptcy, please contact our office to schedule a free initial consultation.