When filing for Chapter 7 bankruptcy, everyone wants to know whether they can save their property or not. Here exemptions come into play. In chapter 7 bankruptcy, exemption allows you to keep a part of or whole property.
The amount of property you can exempt depends on the state in which you reside. For example, if your state allows $3000 bike exemption, then you can keep your bike worth $3000 or less. However, if your bike worth $4000 (more than $3000), then the bankruptcy trustee can take your bike and sell it. After the proceeding of sale, you will get $3000 exemption money from the trustee and the rest amount will be distributed among your creditors.
Property Under Secured Loan
Generally, security loan interest will not get affected by the bankruptcy. Bankruptcy doesn’t remove security interest but the bankruptcy trustee has concerns about the equity you have in that particular property. Equity can easily be calculated by subtracting the balance amount of the loan from the total value of the property. You can exempt a certain value of equity in the personal property (except in real estate property).
If you do not have equity in the personal property, then trustee can’t take away your property. However, to keep the property you must have to make regular installments to your lender. Your lender may also ask you to sign a new agreement after the bankruptcy.
Clothing and Household Goods
As clothing and household goods have low resale value, they are normally exempted in the bankruptcy. However, if you possess a high value individual item and are unable to exempt it, then bankruptcy trustee can take it and sell it.
Money saved in qualified retirement accounts are generally fully exempted. However, if your retirement plan is a fraudulent or not a true retirement account, then trustee have rights to take away your retirement money.
Cash, Jewelry and other Property
Most of the states have provisions to exempt certain amount of individual’s personal property. The amount of such exemptions totally depends on the state you live in.
Debts incurred after you filed the bankruptcy
If you clear a new debt after filing your bankruptcy then it will be considered as a part of your discharge. Debts incurred prior to the bankruptcy filing date can be eliminated from your bankruptcy. This simply means that you will be liable for every post-petition debt you take out after filing your bankruptcy case.
You should not take Bankruptcy easily. It is advised not to file a bankruptcy petition without hiring an attorney. You might think that you can’t afford the fees of a lawyer at a time of bankruptcy. However, bankruptcy has many complexities, it is full of pitfalls that can affect the result adversely. So, you should hire an experienced attorney to represent your case. It is better to pay the fees of a lawyer than to lose all your property,
While searching for a bankruptcy lawyer, select a lawyer who has high success rate. Contact chapter 7 lawyer San Diego to prepare and file your bankruptcy case.