Atari Files for Bankruptcy

It was a nostalgic hit when I heard news about Atari filing for bankruptcy.  Their goal, however, is to survive the bankruptcy and hopefully have their debts restructured.  This is similar to an individual’s Chapter 13 filing.  Atari also has the option of selling its assets, so perhaps the buyers may continue the Atari brand or its holdings.

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Warren Sapp Auctions off $6,500 worth of Air Jordan Sneakers

The need for bankruptcy does not discriminate among the sports.  Former NFL star Warren Sapp recently had to auction off a massive collection of Air Jordan sneakers for his bankruptcy case.  The Air Jordans were assets that could not be exempt and therefore becomes part of the bankruptcy estate.  Child support payments have priority over unsecured creditors such as credit cards, and therefore ahead in the line of creditors.

List All Assets: Tell Your Attorney Everything

The importance of telling your bankruptcy attorney EVERYTHING that you have cannot be overstated.  If you have a doubt about whether your prized collection of Furby dolls is worth something, tell your attorney.  That Egyptian relic that is possibly real or fake, tell the attorney.  Even if you don’t think that rust bucket that’s been in your garage for 30 years is worth anything, tell your attorney anyway.  One of the jobs of a trustee is to add any assets to the bankruptcy estate during your case.  If the trustee later finds out that there is potentially valuable property that should have been in your bankruptcy case, the case can be reopened (even after the discharge of debts has been granted).

Transferring Assets

Are you planning on filing for bankruptcy?  Have assets?  Do not plan on giving away or transferring assets before filing for bankruptcy.  Transferring property to family or friends will look like an attempt to defraud the bankruptcy process.  If such transfers are not disclosed and the trustee finds out about the transfer even after the debts are discharged, any discharge of debts granted by the court could be nullified.  In the worst case scenario, if a transfer is found to be purposefully performed and hidden, the filer may face criminal charges.  Assets include physical personal property, investments, real estate, past interests, future interests and money.

Overlooked Assets in a Bankruptcy Filing

Full disclosure is one of the most important themes in a bankruptcy filing.  Even if it seems unimportant, if it has any financial relation to you, it should be included in your filing.  Some examples include: forgotten bank accounts, tax refunds, marital settlements, rent security deposits, pawned property, rights as a beneficiary in a life insurance policy and legal claims that have been filed against a 3rd party.

The bankruptcy trustee will be interested in determining whether any of these are non-exempt.  Failure to disclose such assets may lead to a delay in the bankruptcy process or even a denial if it is found that such assets were purposefully hidden.