Bankruptcy deals, in large part, with assets. Before each Chapter 7 and Chapter 13 case, there is a determination of what assets the debtor has. In Chapter 7 cases, this is largely to determine which exemptions are needed to protect those assets and whether they are able to be protected at all. In Chapter 13 cases, a large amount of assets can determine how much you will pay back to unsecured creditors. Regardless, an asset determination by your attorney prior to filing is crucial to the success of your case.
One of the inquiries designed to examine any assets are questions from the attorney prior to filing. This line of questioning looks at the debtor's real estate, potential law suits, bank accounts, vehicles, or any right to money. These are asked in the same vein as the bankruptcy trustee at the trustee meeting later. Besides looking at real estate or vehicles (which can also be determined by routine legal research), the focus is on potential claims or right to money the debtor may have.
There are times, though, that even with the best preparation assets can be found in a case. Some instances include when a debtor wins the lottery during the bankruptcy, someone passes away and leaves the debtor an inheritance, or the debtor is injured and has a right to sue for that injury.
In those instances, the lottery winnings, the inheritance, or the personal injury claim all become property of the estate. The trustee will use whatever money he can to pay the unsecured creditors and then turn around and refund the debtor the balance. In a Chapter 7, if the winnings are short, the rest of the debt will likely be discharged after the amount taken is processed and distributed. Thus, it shows that even a stroke of luck during bankruptcy can turn a simple no asset case into one with major assets.
