Exempt vs. Non-exempt Property Under Chapter 7
For most consumers, life before bankruptcy is fraught with financial difficulties. It is important to remember that although bankruptcy is not the first resort, it is best not to wait too long to take action. If you are facing what seems to be insurmountable debt, contact an attorney at once in order the make the best of a bad situation.
Arizona Debt Relief Attorneys: Chapter 7 Bankruptcy
With the help of an experienced lawyer, filing bankruptcy under Chapter 7 can be a real solution for those who are struggling with overwhelming debt. Chapter 7 can give consumers a fresh start by eliminating unsecured debt like the money owed to credit cards. Filing bankruptcy under Chapter 7 can stop collections calls and creditor harassment immediately.
The following information is designed to give you a basic understanding of Chapter 7 bankruptcy. For answers to your specific questions, we invite you to contact Clark Law Offices in Phoenix, Mesa and Glendale for a free, no obligation, no pressure consultation.
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Clark Law Offices are conveniently located in Phoenix, just south of the Biltmore, minutes from Hwy 51, and in Mesa just off the Grant Road Exit from I-10. Our attorneys serve the needs of clients struggling with overwhelming debt throughout Arizona. Contact us today for a free consultation.
In 2005, the bankruptcy laws were changed in an effort to make it more difficult for consumers to qualify for Chapter 7 bankruptcy. The good news is that, in our experience, many still qualify. To find out if you qualify or to discuss the full range of debt relief options available to you, contact Clark Law Offices in Phoenix and Mesa today.
Exempt vs. Non-exempt Property Under Chapter 7
In a Chapter 7 liquidation case, the debtor must relinquish certain property to the bankruptcy trustee so that he or she can sell the property and use the proceeds to pay off debts. Property of the bankruptcy estate is broadly defined under Section 541 of the Bankruptcy Code. The estate is technically the legal owner of all of the debtor's property and consists of all legal and equitable interests that the debtor has in property at the initiation of the bankruptcy case. Income that the debtor earns after the date of the petition is not included in the estate. Debtors, whether they are businesses or individuals, are often justifiably concerned about what property they will be allowed to keep and what they must give up. A bankruptcy lawyer at Clark Law Offices in Phoenix, Arizona, can answer these and other questions, allay fears and keep the process moving forward as painlessly as possible.
A debtor must file a schedule of exempt property with the court. Exempt property is property that the debtor can protect from liquidation. The Bankruptcy Code allows each state to adopt its own exemption laws, which the debtor can select instead of the federal exemptions. It is important to consult with an attorney who can explain the exemptions available under your state's laws and how they compare to the available federal exemptions.
Non-exempt Property
Items that the debtor usually must forfeit include:
- Expensive musical instruments, unless the debtor is a professional musician
- Collections of stamps, coins and other valuable items
- Family heirlooms
- Cash, bank accounts, stocks, bonds and other investments
- A second car or truck
- A second home or vacation home
Exempt Property
Certain types of property are exempt, meaning that the debtor can keep that property. Exempt property includes:
- Motor vehicles, up to a certain value
- Reasonably necessary clothing
- Reasonably necessary household goods and furnishings
- Household appliances
- Jewelry, up to a certain value
- Pensions
- A portion of the equity in the debtor's home
- Tools of the debtor's trade or profession, up to a certain value
- A portion of unpaid but earned wages
- Public benefits, including public assistance (welfare), social security and unemployment compensation, accumulated in a bank account
- Damages awarded for personal injury
Speak to a Bankruptcy Lawyer
If you have questions about what property you will be allowed to retain if you file for bankruptcy under Chapter 7 of the Bankruptcy Code, it is prudent to seek the counsel of an experienced and knowledgeable bankruptcy attorney at Clark Law Offices in Phoenix, Arizona, who can respond promptly and accurately and put your mind at ease.
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