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McCord & Hemphill | Bend Attorneys | Bankruptcy | Estate Law

Will the Bankruptcy Trustee Come to My Home?

November 14, 2012 by Brian Hemphill

Brian Hemphill
Last updated: October 19th, 2020

Reading time: 2 minutes

One breath summary: People who are considering filing for bankruptcy protection are often concerned about whether the bankruptcy trustee will come to inspect their home and assets.  The short answer is: probably not.

When you file for bankruptcy protection, you are required to submit bankruptcy paperwork, including a Petition, a set of Schedules, and a Statement of Financial Affairs.  In those documents, you are required to list all of your assets, such as your real estate, bank accounts, insurance policies, clothing and jewelry, household goods, vehicles and so on.  That paperwork must be complete and accurate and must be signed under the penalties of perjury.  In addition, when you attend your bankruptcy hearing, you are required to testify under oath about your assets, again under the penalties of perjury.  If you are intentionally dishonest in your bankruptcy paperwork or in your testimony at your bankruptcy hearing, you could be subject to criminal prosecution for bankruptcy fraud or perjury, which are felonies and carry the risk of imprisonment.

Because of these severe penalties for dishonesty in your bankruptcy, it is presumed that the information you provide in your bankruptcy paperwork and at your bankruptcy hearing is truthful and accurate.   However, the bankruptcy trustee does have the option for a first-hand inspection of your assets.  That could mean that the bankruptcy trustee could come to your home (or to wherever your assets are located) and inspect your assets.

The bankruptcy trustee is in charge of administering your assets while you are in bankruptcy.  That includes conducting a review of your assets to determine whether you have any assets are available for distribution to your creditors.  The bankruptcy trustee usually reviews your assets based on the information contained in your bankruptcy paperwork and the information from your bankruptcy hearing.  However, the bankruptcy trustee does have the option to personally inspect your home and your assets.

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Inspections are extremely rare.  There are only a few situations where the bankruptcy trustee might decide to inspect your home and your assets:

  • The bankruptcy trustee suspects fraud or hidden assets;
  • There is uncertainty about the nature, value or condition of your assets; or
  • The bankruptcy trustee must take possession or control of your assets to protect the assets from deterioration or decrease in value.

If the bankruptcy trustee decides to personally inspect your assets, the trustee either needs your permission or an order from the bankruptcy court.  If you give your permission for the inspection, you can cooperate with the bankruptcy trustee to arrange a convenient time for the inspection.  On the other hand, the bankruptcy trustee may also apply for a court order authorizing the trustee to search your home with the assistance of the U.S. Marshal and, if necessary, break open doors, locks or safes.  These orders are usually obtained without any prior notice to you, so as to prevent you from concealing any assets in advance of the inspection.

Although this article refers to an inspection by the bankruptcy trustee, the trustee might not be the person who actually conducts the inspection.  Instead, the bankruptcy trustee might send an appraiser or auctioneer to review your assets on the trustee’s behalf.

The most important thing to remember is that you should be sure accurately disclose all your assets in your bankruptcy paperwork and bankruptcy hearing.  If you do, there is usually no reason for an inspection by the bankruptcy trustee.

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Bankruptcy questions can be complicated.  If you have questions about this topic, please do not hesitate to contact us to schedule a consultation.

Related Posts

  • Who is the Bankruptcy Trustee?

  • What is the "Bankruptcy Estate"?

  • Bankruptcy Filing Fees 2020

Filed Under: Bankruptcy Tagged With: bankruptcy, bankruptcy hearing, bankruptcy trustee, chapter 13, chapter 7, fraud, inspect my house, inspection

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