I have an unvested stocks(from my work company) which won't start vesting until after a year from now. Vesting is typical which is 20% per year. Now, I'm in a midst of filling out questionnaires for chp13 bankruptcy and I ran into problems on how should I update this unvested stocks(RSU-restricted stock units) in the form. Right now it is showing an unvested value in the account but I won't be be able get 20% of whatever its value after a year, then another 20%, another yr and so forth. Also, value will depend on how much my company's stock price during the vest dates.
Now, the question I have is, do I really need to include this unvested RSUs under the assets? If so, how should I calculate or estimate the value due to so many factors affecting value like vesting date, etc? Please help!
You must list everything that has any value even if very minimal value now but may become valuable later. Restricted stock has value that is contingent (because you might get fired or the company could go broke) and unliquidated because you have no idea how much it will be worth. You can hire an expert to value the unrestricted stock but that could be expensive and I think it would just be a guess anyway. I suggest you put on Sched. B how many shares, the current price per share and state that your vesting will be 20% per year at the then market value if you still with the company and the company still in business. You can then state a nominal value of maybe 1% to 10% of current market value and disclose that such is the best estimate of value you can make. Bear in mind that if and when the shares vest and they go up in value and you do not have sufficient exemption the trustee can take the shares to be sold to pay unsecured creditors. So the deal is that if your property now goes up in value it can be liquidated by the trustee to pay your unsecured debts until your case is closed unless the available exemptions allow you to protect the property. If you become rich over night because your company is bought for a gazillion then you might be able to dismiss the C13 case and pay off your creditors fast. Wouldn't that be great!
The Bankruptcy Schedules require you to list all property, including on Schedule B (19) equitable or future interests. Is there some reason why you think it isn't important to list all your assets as required by law? Do you understand that if you fail to list all your assets you could be denied a discharge of your debts & even face criminal prosecution for Bankruptcy fraud?
So why would anyone even consider not listing all their assets in a Bankruptcy petition?
Are you serious? Of course you must list these assets!
You must list everything that you own or are entitled to. Unvested stocks fall under that requirement. Gather all of the information about the stocks including the number, the date they vest and the current value, if any. Your attorney can help you determine the value.
[This communication is intended as general information and not specific legal advice, and this communication does not create an attorney-client relationship.]
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