Will you lose your dog in a Chapter 7 bankruptcy filing?

Colorado is the perfect place to raise a pup. After all, the climate in the Centennial State is favorable for your furry friend. Even better, with countless miles of hiking trails and dog parks seemingly everywhere, you have plenty of space to enjoy your pooch. If you have fallen in love with your dog, though, you may worry about losing him or her after declaring bankruptcy. 

Chapter 7 bankruptcy protection is a good option for many Denver-area residents drowning in a sea of debt. If you have credit card balances, medical bills, automobile loans and other expenses you are struggling to pay, taking advantage of Chapter 7 may be the right approach. While you may lose some of your assets during your filing, you can probably keep your dog. 

Listing your assets 

When you file for a Colorado bankruptcy, you must list everything you own. Then, your property becomes part of the bankruptcy estate. You should realize that your pet is a piece of property under bankruptcy law. As such, when inventorying your assets, you must include your pooch. 

Selling your assets 

With a Chapter 7 filing, the bankruptcy trustee sells some of your assets to satisfy outstanding debts. Therefore, you may have to sacrifice certain belongings. Your dog is probably not one of them, though. That is, even though your pet means the world to you, it is likely not worth much on the open market. Furthermore, the cost of selling a companion animal likely outweighs any benefit the bankruptcy trustee may realize from the sale. 

Understanding the exception 

While bankruptcy trustees in the Lakewood area usually do not sell dogs to pay debts, there is an exception. If your dog is particularly valuable, the trustee may decide to sell the animal. For example, if you have a pedigreed show dog, it may be worthwhile for the trustee to tap into its value to pay your creditors. 

If you are thinking about filing for Chapter 7 bankruptcy protection, you probably have some anxiety about the future. Fortunately, you likely do not have to worry about losing your dog in your quest to find financial freedom.