What Just Happened? How Asset Forfeiture Affects Bankruptcy Distributions

“Many aspects of the interplay between the bankruptcy and asset forfeiture systems are unsettled. The federal government’s forfeiture powers can profoundly affect the course of a typical bankruptcy case. Yet, these powers serve compelling interests and may alleviate enormous hardship to innocent victims that might otherwise be diluted in a bankruptcy case. When bankruptcy and forfeiture clash, the ideal outcome is a process that coordinates the proceedings from the outset, with the early identification of shared goals, in pursuit of the same end game-the maximum restoration of property to persons harmed.”

Retrieve article in pdf below; reprinted with permission of the American Bar Association.