If I filed a Chapter 13 and stripped the kitchen and sold the items, am I in trouble?
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If I filed a Chapter 13 and stripped the kitchen and sold the items, am I in trouble?
Asked on April 29, 2011 under Bankruptcy Law, Illinois
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 12 years ago | Contributor
Chapter 13 is the repayment plan bankruptcy, where you have to repay creditors, according to a court-ordered payment plan, for three to five (usually five) years. It's not the sell-your-assets-for-the-creditors bankruptcy. That means that stripping and selling the kitchen should not directly implicate the payment plan, since the payment plan is based on income vs. debts and expenses, not assets. That said, this was income, albeit of a one-time variety, and so could have some effect on your ability to play and the plan. Thus, while stripping and selling the kitchen is must less significant in a Chapter 13 bankruptcy than in a Chapter 7 bankruptcy, if you did not report this income, you have made mistatements in relation to the bankruptcy, in relation to your income, and you should consider correcting the situation with the appropriate disclosure.
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