What Happens to Your Animals in Bankruptcy?
Often, people are aware that filing for bankruptcy can have an effect on their home or car, or even their jewelry. But few people think about the impact a bankruptcy filing could have on their family pets or livestock. What happens to animals during a bankruptcy?
Fortunately, most people’s household pets are exempt under state bankruptcy laws. In Arizona, A.R.S. § 33-1125(3) exempts from bankruptcy any domestic pets, horses, milk cows and poultry with a fair market value not to exceed $500. Anything over $500 in value is not exempt, and can be sold by the trustee to pay your creditors.
However, note that the statute does not make exempt bulls or sheep, or other common livestock many Arizonans may have. And those with livestock are well aware than $500 is not a large value for some of these types of animals.
Additionally, those with purebred dog breeding businesses should be aware that their animals are probably worth more than the statute permits, and could be taken from them.
Of course, whether a trustee can and will take away your animals are two different things. For instance, you may have a shelter with 500 mutts living in it, and those animals may technically be worth well over $500. But if the animals are difficult to sell, the trustee may choose not to sell them. For this reason, the people who should be most concerned are those with valuable animals, such as designer dogs, exotic animals, or valuable livestock. There is a market for these animals, and a trustee is more likely to sell them. Still, the hassle of dealing with animals and marketing them may not be worth it in some circumstances.
A man named Sam Massola from Ohio, had filed for bankruptcy four times, and never lost his bears, wolves, tigers, and lions. This is probably due to the fact that such exotic animals have a limited market of buyers, and are difficult to keep before an owner can be found.
Please speak with a competent local bankruptcy attorney to discuss your options and your personal situation. We offer a free consultation so that you may ask all of the questions you require to make an educated decision.