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Property Exempt and Non-Exempt

Property Exempt and Non-Exempt
"""When you petition for bankruptcy and the court grants it, your assets are classified as exempt and nonexempt. Exempt categories are those that creditors are unable to access and that you may therefore retain. Non-exempt categories are those that can be sold at auction or through other means in order to pay off creditors.

Each state has its own regulations regarding which properties are exempt and which are not. For instance, in virtually all instances, a homeowner's primary residence is considered exempt and beyond the reach of creditors. However, second or vacation homes are typically designated non-exempt and may be sold or auctioned.

If your bankruptcy petition is approved, you will be assigned a trustee. This individual will be responsible for selling your non-exempt properties. Due to his commission-based compensation, he has a vested interest in your non-exempt items. When items are sold, the court receives the proceeds. The money is then returned to the trustee for distribution to creditors. In this process, he will deduct his commission, which is typically based on a declining scale that decreases as the amount of merchandise sold increases.

In many instances, your documentation will indicate that you have no valuable items or property. In this situation, the trustee has no interest in selling your belongings because doing so would be a waste of his time.

In practical terms, this means that unless you have valuable heirlooms among your listed property, you will likely be able to retain the majority of it, as it would cost the trustee more time and money to sell it. These cases are typically referred to as ""no-asset"" cases because the debtor has no valuable assets. Don't be surprised if, in a no-asset case, you encounter the trustee only once and never hear from him again.

However, if you own property that can be readily sold on the open market, such as multiple late-model automobiles, you will likely lose those.

If you believe that hiding assets to prevent them from being sold or auctioned is a smart idea, you should reconsider. If any evidence of fraud is discovered, not only could your bankruptcy filing be halted, but you could also be convicted of a criminal offense and face prison time.""

" - https://www.affordablecebu.com/

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"Property Exempt and Non-Exempt" was written by Mary under the Finance / Wealth category. It has been read 74 times and generated 0 comments. The article was created on and updated on 03 June 2023.
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