What Can I Keep In Bankruptcy?
Chapter 7 bankruptcy is often called “liquidation bankruptcy.” This name is not quite accurate for the most part because most people never experience any kind of bankruptcy liquidation. Our clients certainly do not experience liquidation because for the most part we don’t allow our clients to get themselves into a bankruptcy filing if it would be detrimental for them to do so.
Most Normal Assets Are Exempt In Bankruptcy
Before you rush to judgment that you do not qualify for bankruptcy–or because you’re nervous that one or more of your assets will be liquidated by the bankruptcy court, you should consider contacting a bankruptcy attorney fort worth.
Most assets which you have in your household are most likely going to be exempt. For example, your vehicles (up to one vehicle per licensed driver in the household,) your home, your clothing, tools of your trade, heirlooms, and even cash in the bank up to a certain amount (generally about $10,000 per filer..i.e. if filing singly, about $10-11,000 is exempt, and if filing jointly as a married couple, up to $20-22,000 in cash in the bank is generally exempt.) If you have more than one vehicle per licensed driver, this rule may also still hold you in a good position if you don’t have equity in one of the vehicles. So long as there is a loan on the vehicle that places its equity at or close to nothing, then you won’t have to worry about giving up that vehicle. The same holds for other assets like boats, motorcycles, and RVs. For example, if you had a boat that is worth about $14,000 and you have a loan for $15,000 or even for $13,000 on it, then the trustee will generally not consider that to be much of an asset, and certainly would leave it alone for purposes of liquidation to pay off creditors. The trustee takes 10% of all assets which are liquidated to pay creditors. Hence, unless there is a significant value in the asset, it is not worth the time and money spent on picking the asset up, storing, and selling it.
Common Exceptions To Exempt Assets
Some exceptions to exempt assets include boats, motorcycles, cars or trucks in excess of the number of licensed drivers in the home, airplanes, expensive jewelry in excess of typical heirloom and wedding jewelry, second homes, rental homes, or interests in a business or other type of company. Stocks that are not held in ERISA qualified retirement accounts are also not exempt from liquidation.