When Colorado residents make the decision of whether or not to take on additional debt, a main consideration in the decision is how much assets they have at the time. Individuals who have more assets may feel comfortable, and more able, to take on an additional loan or debt payment. Of course, when the person's assets become outweighed by the debt, the individual may need to consider different options for debt relief, including filing for bankruptcy.
In bankruptcy, particularly Chapter 7 bankruptcy, an individual's assets are a key part of the case, as the assets are sold and the profits are used to pay off the debt that is held by creditors. While individuals may think of common assets, like what is in their bank account, the trustee appointed in the case may also be able to sell off more unique assets if they do not qualify for a particular exemption.For example, Warren Sapp, a former NFL defensive lineman and recent inductee into the Hall of Fame, filed for Chapter 7 bankruptcy in 2012. Some of his property has been sold off to pay part of the $6.7 million in debt he reported on his personal bankruptcy petition. Among these assets were Sapp's collection of approximately 213 pairs of shoes, which were recently sold at a bankruptcy auction for $6,390, or about $30 per pair of shoes. Many of the shoes were unused and still in boxes.
While the shoes may seem like an odd asset to sell in a bankruptcy case, a bankruptcy filing leads to the creation of an estate, which consists of all legal or equitable interests the debtor has in property when the case is commenced. Accordingly, individuals thinking of filing for bankruptcy may need more information in order to determine what property they may have that may be at issue in the bankruptcy case, and whether any exemptions may be available on that property.
Source: The Tampa Tribune, "Report: Sapp's sneaker collection fetches $6,390 at bankruptcy auction," Sept. 5, 2013