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Which Assets May Be Kept During a Chapter 7 Bankruptcy?

Which Assets May Be Kept During a Chapter 7 Bankruptcy?
"""If you are contemplating filing for Chapter 7 bankruptcy, you are likely aware that the law does not permit you to retain all of your valuable assets. You may have heard that there is a limit on the types and amounts of assets you are permitted to retain and still qualify for a Chapter 7 bankruptcy. But let's get even more specific because filing for bankruptcy without knowing precisely how your assets will be handled is a recipe for calamity. Here are the exemption limits for the most common categories of assets for a single filer, with the understanding that the figures must be doubled to determine the limit for joint filers:

o Real estate: $20,200 o Automobile: $3,225 o Household goods and furnishings: $10,775 o Audio, video, and computer equipment: Included with household goods
o Clothing contained in household products
o Jewelry $1,350 o Cash, Checking/Savings Accounts $1,075 (the """"Wildcard"""").
o Trade Tools $2,025 o Retirement Accounts, 401K, 403b, etc., unlimited if ERISA-qualified

The preceding list is by no means exhaustive; however, for the sake of brevity, we will limit ourselves to these more prevalent asset classes.

This prompts the obvious question: what happens if the value of my assets exceeds these exemption limits? Obviously, you should consult with an experienced bankruptcy attorney before deciding whether it is prudent to file bankruptcy under such circumstances. Because, if you do, the trustee may """"administer"""" the asset by selling it and remitting you an amount equal to the exemption limit. For instance, if your vehicle is worth approximately $8,000, the trustee may seize and sell it, return to you the amount of your exemption limit for the car (i.e. $3,225), and distribute the remainder to your creditors (roughly $5,000 in this example).

Alternately, the trustee may permit you to """"purchase back"""" the assets he would otherwise administer by paying him the amount by which the asset's value exceeds the exemption limit. In our example, you may be required to pay approximately $4,800 to the trustee in order to retain the vehicle. Since you presumably don't have $4,800 lying around (if you did, you wouldn't be in bankruptcy), the question arises: How long would the trustee give you to pay the $4,800? Inasmuch as the trustee will likely not wish to add'receivables management' to his already extensive list of responsibilities, the answer is likely to be less than six months.

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

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"Which Assets May Be Kept During a Chapter 7 Bankruptcy?" was written by Mary under the Finance / Wealth category. It has been read 57 times and generated 0 comments. The article was created on and updated on 02 June 2023.
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