When a bankruptcy is filed, a debtor must list all of the assets that they own on the date their case is filed. These assets include: cash, bank accounts, retirement accounts and 401(k)s, household goods and furniture, jewelry, clothes, guns, vehicles, potential inheritances, claims against third parties, and many other categories. Whether or not a person can keep their property in bankruptcy depends on the value of the asset and whether it can be exempted by a state exemption law. Many of the assets listed above may have specific exemptions that cover all or part of their value. Some assets may not fall under a particular exemption and would be considered “non-exempt.”
If a person files a Chapter 7 bankruptcy, their property must be exempt under bankruptcy exemptions in order to keep it. Otherwise, property that is not exempt or only partially exempt can be claimed by the Chapter 7 Trustee and sold-off, with the resulting proceeds going to the Debtor’s creditors.
A debtor can file a Chapter 13 bankruptcy to keep their property, even if it would be considered non-exempt. However, the value of the non-exempt assets will have to be paid over to the creditors through the Chapter 13 repayment plan. Therefore, the more non-exempt assets a Chapter 13 debtor has, the more they have to pay back to their unsecured creditors through their repayment plan.
*DISCLAIMER: The information contained within this page and/or this site as a whole, including replies from McGuire & Hepperlen, LLP to this PRE-CONSULTATION FORM, is not intended as legal advice, nor to create an attorney-client relationship between you and McGuire & Hepperlen, LLP and/or www.mhlawoffices.com; it is informational in nature. Though bankruptcy is federal law, your particular state of domicile can impact the advice you receive. Furthermore, bankruptcy law is very complicated; therefore, an experienced bankruptcy lawyer within your state of domicile should be consulted for specific issues concerning your particular set of facts. Users of the internet should not rely on an e-mail message to McGuire & Hepperlen, LLP and/or www.mhlawoffices.com through this web site to create an attorney-client relationship. Said users should not act upon any information in this web site without first directly consulting legal counsel of their own. The hiring of a lawyer is an extremely important decision which should not be based solely upon advertisements, web pages, brochures, or other promotional materials. Unless a written retainer agreement has been signed by a member of McGuire & Hepperlen, LLP, no attorney-client relationship exists between you and McGuire & Hepperlen, LLP. This web site might be characterized as an ADVERTISEMENT. The responses and information are intended to be general and should not be relied upon for any specific situation. SITE MAP. For legal advice, consult an attorney. . Copyright McGuire & Hepperlen LLP all rights reserved 2012