Law Office of John Bristol - 1776 N. Pine Island Road, #224, Plantation, Florida 33322 (954) 475-2265
Since 1988, Fort Lauderdale Bankruptcy Attorney Center of John Bristol has filed more than 5,000 consumer Chapter 7 Bankruptcy and Chapter 13 Bankruptcy Cases in the Fort Lauderdale area (the Southern District of Florida). As a Fort Lauderdale Bankruptcy Attorney; John concentrates his Bankruptcy law practice only in Broward County. We offer PAYMENT PLANS and give FREE CONSULTATIONS (954) 475-2265
Exempt Property In a Bankruptcy Case means "property you get to keep"
Exempt property in a Bankruptcy case can include your clothing personal property vehicle and homestead. Under the bankruptcy code you designate your exempt property. Generally, you are allowed to keep $1,000.00 worth of personal property, $1,000.00 in equity in a vehicle and your homestead. Although in theory all property of the debtor that is not excluded from the estate under the Bankruptcy Code becomes property of the estate (i.e., is automatically transferred from the debtor to the estate) at the time of commencement of a case, an individual debtor (not a partnership, corporation, etc.) may claim certain items of property as "exempt property in a bankruptcy case" and thereby keep those items (subject, however, to any valid liens or other encumbrances).
An individual debtor may choose between a "federal" list of exemptions and the list of exemptions provided by the law of the state in which the debtor files the bankruptcy case unless the state in which the debtor files the bankruptcy case has enacted legislation prohibiting the debtor from choosing the exemptions on the federal list. Almost 40 states have done so. In states where the debtor is allowed to exempt property in a bankruptcy case and choose between the federal and state exemptions, the debtor has the opportunity to choose the exempt property that most fully benefit him or her and, in many cases, may convert at least some of his or her property from non-exempt form (e.g., cash) to exempt form (e.g., increased equity in a home created by using the cash to pay down a mortgage) prior to filing the bankruptcy case.
The exemption laws vary greatly from state to state. In some states, exempt property includes equity in a home or car, tools of the trade, and some personal effects. In other states an asset class such as tools of trade will not be exempt by virtue of its class except to the extent it is claimed under a more general exemption for personal property.
One major purpose of bankruptcy is to ensure orderly and reasonable management of debt. Thus, exemptions for personal effects are thought to prevent punitive seizures of items of little or no economic value (personal effects, personal care items, ordinary clothing), since this does not promote any desirable economic result. Similarly, tools of the trade may, depending on the available exemptions, be a permitted exempt property in a bankruptcy case as their continued possession allows the insolvent debtor to move forward into productive work as soon as possible. for additional information see Wikapedia
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Chapter 7 Bankruptcy Or Chapter 13 Bankruptcy
Fort Lauderdale Bankruptcy Attorney John Bristol has filed more than 10,000 Bankruptcy cases in Florida since 1988. We concentrate Now our law practice on Chapter 7 Bankruptcy (liquidation) and Chapter 13 Bankruptcy (personal reorganization) cases in the Fort Lauderdale and Broward County area
Filing bankruptcy does not mean that you have to give up all of your property. Through exempt property in a bankruptcy case, you can keep a certain amount of your assets safe in bankruptcy. Many exemptions protect specific types of property, such as a motor vehicle or your wedding ring. Sometimes an exemption protects the entire value of the asset. Other times, an exemption protects up to a certain dollar amount of an asset. Some exempt property in a bankruptcy case includes non-specific property, called "wildcard exemptions," and can be applied towards any property you own. If you can exempt an asset, then you don’t have to worry about it being taken or affecting your bankruptcy.
A Chapter 7 Bankruptcy is a liquidation bankruptcy where the appointed trustee is looking to sell off your assets to pay your creditors. However, the bankruptcy Court cannot sell anything you are able to claim as exempt property in a bankruptcy case. This is how bankruptcy exemptions help you to protect your assets in a Chapter 7 bankruptcy. For example, if your state has a $5,000 motor vehicle exemption and you only have one car worth $4,000, then you can keep it. For more information, see Exemptions in Chapter 7 Bankruptcy.
The Fort Lauderdale Bankruptcy Attorney Center
Law Office is on the Corner of Sunrise Boulevard and Pine Island Road
From I 95: Take Sunrise Boulevard West to Pine Island Road
From I 595: Take Pine Island Road North to Sunrise Boulevard
1776 N. Pine island Road, #224
Plantation, Florida 33322
A Chapter 13 bankruptcy allows you to keep all your property and reorganize your debts. However, the amount you must pay certain creditors still depends on how much property you can claim as exempt property in a bankruptcy case. The value of any nonexempt assets must be paid to your nonpriority unsecured creditors (such as credit card issuers) in your bankruptcy. So in a Chapter 13, exemptions help keep your plan payments low by reducing the amount you are required to pay creditors. For more information, see Exemptions in Chapter 13 Bankruptcy.
The amount of property you can exempt depends on which state’s exemption laws you are using. Each state has its own bankruptcy exemptions. Federal law also has a set of exemptions. (To learn about those, see The Federal Bankruptcy Exemptions.) Some states require you to use the state exemptions; others give you the option of choosing either its set of exemptions or the federal system (you cannot mix and match from both sets). Which state’s exemption laws you qualify to use depends on where you live or have lived recently (called the "domicile requirements."). For more information on differences between state and federal exemptions and domicile requirements, see Which Exemptions Can You Use In Bankruptcy?
In addition to state and federal bankruptcy exemptions, there is a set of federal exemptions that exist under nonbankruptcy law. These exemptions function similarly to bankruptcy exemptions in protecting your property in bankruptcy. However, federal nonbankruptcy exemptions are only available to you if you are using your state’s exemptions (you cannot combine the federal bankruptcy and nonbankruptcy exemptions). If you are using state exemptions, then you can use the nonbankruptcy exemptions in addition to those. For more information, see The Federal Nonbankruptcy Exemptions. From http://www.nolo.com/legal-encyclopedia/bankruptcy-exemptions
When you file for bankruptcy, you relinquish ownership of your property to the bankruptcy court, and it becomes part of what’s known as the bankruptcy “estate.” The bankruptcy trustee—the person appointed by the court who is responsible for finding funds to pay your bills—holds the property on behalf of your creditors. That doesn’t mean that you lose all your property, however. In fact, most people can keep everything they own. Bankruptcy law allows you to “exempt,” or take out of the bankruptcy estate, the things you need to maintain a home and job, such as household furnishings, clothing, and an inexpensive car. You can find out what you’ll be able to keep by checking the exemption statutes in your state. Most people want to keep exempt and nonexempt assets and might even entertain doing so. Don’t do it. Simply put, the bankruptcy court is not the place to skirt the rules.
When you file for bankruptcy, you’ll tell the court about your property by listing it on bankruptcy Schedule A/B: Property. The types of property you’ll list include: real estate (such as a residence, building, or land) vehicles (cars, vans, trucks, tractors, sport utility vehicles, motorcycles, watercraft, aircraft, motor homes, ATVs, and the like) personal and household items (such as furnishings, electronics, collectibles, sports equipment, firearms, clothes, and jewelry) financial assets (bank, stock, and retirement account balances, business interests, legal claims, tax returns, and other monetary interests) business-related property (any property associated with a business, such as a restaurant oven or merchandise) any other assets you own.
When you account for your property on Schedule A/B, you’ll also include the value of the asset. Not all property values are assessed the same way, however. For example, you’ll use the “retail replacement value” (the amount of money needed to replace an item of the same age and condition) for household items and the “fair market value” (the price your home would bring on the real estate market) for property.
Each state decides the assets residents can exempt in bankruptcy. Exemptions are not automatic, however. You must list the property you’re entitled to exempt on Schedule C: The Property You Claim as Exempt. If you don’t list the property, the trustee will be able to sell it and distribute the
proceeds to your creditors.
Your state will likely have an allowance for the following types of exemptions: homestead exemption (some or all of the equity in the home you live in) vehicle exemption (a small amount of equity in a car) household goods and furnishings (furniture, kitchenware, towels, bedding, garden tools) clothing tools of the trade (a reasonable amount for tools you need for your job), and most retirement accounts.
Whether you’re allowed to keep other items, such as the money in your bank account, depends on your state (although most bank balances are not exempt unless you can prove that someone else owns the funds). Some states have a “wildcard” exemption that allows you to exempt any property up to a certain dollar amount.
Although most states have one exemption schedule, you might live in a state that allows you to choose between two exemption lists. For example, some states allow you to decide between the state and federal exemption scheme. California, on the other hand, has two state exemption schedules: one that favors filers with equity in a home and another that is more advantageous for people without real estate. A filer must choose one schedule or the other but cannot pick from both lists. To learn about the exemptions available in your state, see How to Find Your State
The fate of your nonexempt property depends on the type of bankruptcy you file. If you file for Chapter 7 bankruptcy, the trustee will sell your nonexempt property and distribute the proceeds to your creditors. However, the trustee might let you buy back your motorcycle, boat, or any other nonexempt item if you can afford to do so. (You can learn more about exempting property in a Chapter 7 bankruptcy case in Chapter 7 Bankruptcy Exemptions: What Can I Keep?)
By contrast, you keep all of your property—both exempt and nonexempt—if you file for Chapter 13 bankruptcy. Of course, nothing in life is free. Here’s the catch: You’ll have to pay your unsecured creditors an amount equal to your nonexempt property over your three- to five-year repayment plan. This means that you can expect each dollar of nonexempt property you keep to increase the amount you pay into your repayment plan by a dollar.
If you’re thinking about ways to get around the system, you’re not alone. Most people want to keep exempt and nonexempt assets and might even entertain doing so. Don’t do it. Simply put, the bankruptcy court is not the place to skirt the rules. Trying to obtain property you’re not entitled to in bankruptcy—whether it be by hiding it, omitting it, or through any other means—constitutes fraud and can result in a fine up to $250,000, imprisonment for up to 20 years, or both.
It’s also not a good idea to assume that you won’t get caught. The bankruptcy trustee has an incentive to comb carefully through your schedules. The trustee gets a percentage of any money found for your unsecured creditors (credit card debt, medical bills, personal loans). If something appears amiss, property records can be investigated, and inspections of your home, business, storage space, and safe deposit box ordered. If you bend the exemption rules, you can expect the trustee to file an objection and force you to prove that you’re entitled to the exemption in a hearing before the judge.
If you’re unsure whether you’ll be able to keep your property, consult with a local bankruptcy attorney who can explain the exemption rules and determine how much property you’ll be entitled to keep in bankruptcy.
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The Law Office of John Bristol, 1776 N. Pine Island Road, #224, Plantation, Florida 33322 is a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code. Disclosure: The hiring of a lawyer is an important decision that should not be based solely on advertising. Before you decide please ask us for information concerning out qualifications and experience