Many people are under the misconception that when they file for bankruptcy that basically all they are left with is the clothes on their back. Thinking this, the only reason they go for this type of debt relief is just simply stop the creditors from constantly harassing them. Losing everything is not the case with any of the forms of bankruptcy, but stopping the creditors is.
Do people really lose their pets? The short answer: rarely. However, there are cases in which valuable farm or ranch pets could be included in a bankruptcy estate if exemption laws don’t protect them.
What happens to your pets will depend on a few factors. First of all each state has its own bankruptcy rules. Then the type of pet and what they are worth will also be a big factor. Filing for bankruptcy means that anything you own is an asset, and your assets will now become part of the bankruptcy estate. Your animals are included in this as they are part of your personal property. There are measures in place that do allow you to keep property that is exempted from the bankruptcy.
Some states automatically include the pets in the exemption while other states don’t. If you are in a state that doesn’t have this in place there may be what is known as a wildcard exemption. What this means is you are able to take a specific dollar value and include this in your exemption. If your pet has little dollar value then you could include this in this section of your bankruptcy. This is something that you should raise with your bankruptcy attorney. This professional will advise you as to your options regarding the effect your bankruptcy can have on your pet ownership.