People filing bankruptcy in New York are usually concerned about the disposition of major assets—and they should be—like houses, cars, jewelry, artwork, etc. Minor possessions, such as your furniture, heirlooms, and books are handled differently. True the bankruptcy code creates exemptions for these items. For example, in New York, they’re mostly covered by a $1,000 “other property” exemption, and the alternative federal exemptions provide $11,000 to non-homeowners. Even if that’s not enough, the Trustee doesn’t usually liquidate these items because it’s not worth the hassle. For you, though, they can be worth quite a bit due to sentimental reasons and because it’s inconvenient and expensive to replace them. Thus, renting a storage space plays a minor role in people’s finances and in bankruptcy or foreclosure.
For homeowners, if you are planning to execute a deed-in-lieu of foreclosure agreement or a short sale, then storing some of your belongings in storage might help. By contrast, if you are facing foreclosure, then do not waste your resources on storage space. If you have it already, retrieve your possessions and cancel it before filing if possible. The automatic stay will protect you from foreclosure, and bankruptcy will benefit you more in the long run than storing some of your possessions for money you can’t afford to spend.
Ultimately, renting storage space long term might be worthwhile for seasonal items, like patio equipment or a bicycle over the winter. The payments, though, can mount quickly, so calculate the annual price of the rental unit and see whether it’s worthwhile. Buy renters insurance, and don’t store anything sensitive or sentimental. Storage units can be burglarized, and the market value of your family photo album is nothing as far as your insurance company is concerned. However, if you use storage strategically, it can reduce clutter, just don’t let it turn you into a hoarder. Also make sure it’s worth the cost, especially if you have other debt problems.
For more questions about bankruptcy, the automatic stay, effective strategies for dealing with foreclosure, and protecting your assets in bankruptcy please feel free to contact experienced Landlords rights in Bankruptcy Bruce Weiner for a free initial consultation.
