Pets in Bankruptcy

What happens to pets in bankruptcy? 

When you file a bankruptcy you must list all property you own in your schedules.  Out of all the questions we ask clients about the property they own, the one that usually comes with a look of confusion is when we ask if they own any pets. People wonder why we ask the question and almost immediately ask if they list their pet will they be forced to give them up. The answer is almost always NO, unless they are a prize-winning show animal, livestock, or it is possible to make income off the pet.

Normal pets, such as a dog or cat are not worth enough to be at risk of seizure in a bankruptcy case.  Even a purebred dog or cat that is worth several hundred dollars is unlikely to be taken.  The trustee is not going to incur the expense to house and find a buyer for a pet unless there are thousands of dollars to be made and even then it is probably not worth it for the trustee.  Even if the pet was worth seizing and very valuable the trustee is going to make an offer to you to buy back the pet rather than take it.  In thousands of cases we have never seen a pet seized. 

If the pets you have are used in a business such as a breeding business the trustee may take a second look to see whether they could be sold to pay your creditors. In Kansas there is an exemption for breeding stock or tools of the trade that allows you to protect the animals used commercially from the trustee or your creditors.  If you have several dogs or cats you are breeding and you are selling the litter than you can exempt the animals.  If you have a specially trained dog such as a termite sniffing dog used in a pest control business you can exempt the animal as a tool of the trade.  Some specially trained dogs are worth thousands of dollars because of the cost to train them. 

Pets are considered personal property for the purposes of bankruptcy and need to be listed in your bankruptcy schedules.  You even need to estimate a value for them.  This value is what they are worth today if they were sold, not what you paid for them or how much you feel they are worth because of how much you care for them.  For most people their pets are priceless, but it is very common for older pets to be listed with little or no value in the schedules and this is not an issue where appropriate. 

If you file a bankruptcy, the care of the pet is a monthly expense and will be included in the calculation of monthly expenses to show how much money is spent on food and veterinary care. The trustee is unlikely to dispute the amount you spend on pet care unless it is abnormally high. Generally, around $50 per dog and $30 per cat will not be questioned.  In some cases it is of course appropriate to spend more but you need to be prepared to explain the cost.

In most situations, pets and pet expenses are a non-issue in bankruptcy. If you have a special case, speak with one of our attorneys to discuss your situation and options.  We have offices in Wichita, Topeka, Lawrence, and Overland Park and our bankruptcy attorneys will be happy to go over your questions.  

More Posts

Current bankruptcy trustees in Kansas

One of the key people in bankruptcy is the bankruptcy Trustee. The United States Trustees at the Justice Department appoint and supervise private trustees who administer bankruptcy estates throughout

Death During Bankruptcy

What happens if a person files bankruptcy but dies before receiving their discharge? When a person dies, their heirs generally are not responsible for paying the decedents debts. Rather, the

How can we help?