INSIDE THE LAW OFFICES OF:
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Experienced Bankruptcy Attorneys
What Happens to My Property When I File for
Chapter 7 Bankruptcy?
It is a common misconception among potential bankruptcy filers that, when they file for Chapter 7 Bankruptcy, Creditors are going to swarm to their homes to take all of their property in satisfaction of debt. This misconception could be no further from the truth. In fact, 99.9% of a debtors’ property is untouchable by any Creditors or the Bankruptcy Trustee due to the application of exemptions. As of the writing of this article, the following types of property and their respective values are allowed to be exempted under 11 U.S.C. § 522:
Property Exemptions Allowed Amount Allowed
•Alimony and Child Support (both past and future) owed to you No Limit
•Retirement Accounts No Limit
•Crime Victims’ Compensation No Limit
•Disability, Illness or Unemployment No Limit
•Health Aids No Limit
•Household Goods and Furnishings $ 11,525.00
•Jewelry $ 1,450.00
•Life Insurance No Limit
•Life Insurance with Loan $11,525.00
•Lost Earnings Compensation No Limit
•Motor Vehicle $3,450.00
•Pensions No Limit
•Personal Injury Compensation $21,625.00
•Real Property or Personal Property used as a residence $21,625.00
•Tenancy by the Entirety No Limit
•Tools of the Trade $ 2,175.00
•Veterans’ Benefits No Limit
•Wildcard Exemption (Exempts Anything) $1,150.00 plus up to $10,825.00 of unused Real Property Exemption
•Wrongful Death Payments No Limit
Keep in mind that, when you are valuing your property to satisfy the exemptions as listed above, the property is valued as if you were to sell it at a garage sale or to a pawn shop, except for real property and motor vehicles. Using “Garage Sale” values, it is easy to give exemption protection to all of a your property. The most common instance where the amounts available for exemptions run out is when a debtor has a large amount of equity built up in their home, which causes the Wildcard Exemption to be very small.
In conclusion, and to answer the question presented above, if your property fits into the exemptions listed above, it stays exactly where it was before you filed for Chapter 7 Bankruptcy and will remain there until you decide to depart with it.
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WE ARE A DEBT RELIEF AGENCY AS DESIGNATED BY THE UNITED STATES BANKRUPTCY CODE. WE HELP PEOPLE FILE FOR RELIEF UNDER THE UNITED STATES BANKRUPTCY CODE.
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