Will I Lose My Pets In Bankruptcy?
When it comes to things that people worry about losing in bankruptcy, things like appliances, clothes, jewelry, cars, homes, or businesses are usually things that people have concern about. But nothing comes close to the concern that people have over their pets. In fact, bankruptcy clients almost always ask whether they will lose their beloved pat in bankruptcy.
Losing Pets: Not Going to Happen
The idea of the bankruptcy trustee coming to your door and impounding Fido to sell him at auction is, thankfully, a myth. In fact, people almost never lose household pets when they file for bankruptcy.
Yes, pets are property for bankruptcy purposes. And yes, you will have to list them as property on your bankruptcy schedules or paperwork. But that shouldn’t scare you into thinking anybody is coming for them. They’re not. Many bankruptcy attorneys will tell you that in the years they have been practicing, they have never seen a family pet taken.
Why Aren’t They Taken and Sold?
But there is no exemption that specifically covers animals or pets, and pets are property. So if they’re property, and non-exempt property can be taken and sold by the bankruptcy trustee, why aren’t pets ever taken?
The issue becomes one of value. Your stuff is valued at what it could be sold for or purchased on the open market. Your beloved Snuggles the Cat, or Scraps the Dog, has no value. Anybody who wants a dog would get them from a rescue, a breeder, a friend…there are loads of places that people can get an animal, for cheap or even for free.
Even if it was worth a nominal amount, the trustee would still have to house, feed, and care for while waiting for it to be sold. The trustee doesn’t want to do that, and the money it costs to do that would use up your animal’s $50, $100 or $200 street market value (if it’s even that).
Animals That Do Have Value
Bear in mind, some animals may have value. Horses or cattle or anything considered livestock may have a value. If you do have a show dog that can earn money somehow, or perhaps a service dog that would have a value, there may be an issue.
But these are limited situations, certainly not applicable to everyone. In almost every case, your family pet is safe when you file for bankruptcy.