Cat Seizure in Bankruptcy

One reason we revolted from Britain: Debtors prison. When you couldn’t pay your debts they put you in jail until you could. Seems really strange, doesn’t it? So, well, foreign.

So the concept that one could not be jailed for his debts and has a right to discharge debts in bankruptcy has been with us from the beginning.

And how have Americans reacted to this freedom? They exercise it regularly. Even after the “get tough” Reform Act of 2005 there is a lot a debtor gets to keep in terms of assets notwithstanding declaring bankruptcy. Check out Title 11 section 522 of the United States Code. You get to keep your retirement, 401(k) and IRA. All of it. Such a deal.

Of course various Federal Court Districts around the country have interpreted things differently here and there, sometimes as close as from the Eastern District of Washington ( a closet Red State ) to the Western District of Washington ( which makes this a Blue State in every  Presidential election ). Sometimes within the District decisions vary from Trustee to Trustee.

Once in a recent 341 meeting of creditors the Trustee was examining my client as to her statement of debts and monthly budget. He noted she was discharging veterinary bills and had pet food in her budget. “But”, he triumphantly noted, “you have not listed any pets in your list of assets! Where are your pets!?!”

“I have three cats”, my client confessed, then added “Do you want my cats?”

The Trustee relented, but I had visions of him selling pelts to pay her debts. I am not making this up.

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