Hello, my name is Susan Farris and my hobby is learning about the law. I have an uncle who is an attorney and I've always looked up to him and that's why I find subjects on law very interesting. Through speaking with my uncle and doing research on my own, I've learned about all the different fields of law. Each field of law centers on its own subject and most attorneys specialize in a certain area of law. These include criminal, personal injury, family, bankruptcy, criminal, immigration and business. I find each one of these fields very interesting and I have the utmost admiration for lawyers because they help people through their legal struggles. I wanted to share this information with others who have questions about the different types of attorneys and the law.
Chapter 7 bankruptcy is a process that liquidates a debtor's disposable assets to try to satisfy as much of their debts as possible. Once those assets sell, a court then discharges the remaining debts, leaving them canceled.
The idea of selling off your assets can sound like it will just wipe you out financially. However, the truth is often different. Look at what the truth is regarding Chapter 7 bankruptcy and which assets you might be able to retain.
Selling Disposable Assets
One way to think of disposable assets is that they're usually things you don't need. If a family owns three cars, for example, the court-appointed trustee will typically want to sell the least practical and most expensive one.
Notably, the court reserves the right to sell assets that are likely to bring significant value even if you use them practically. If someone's only car happens to be a Ferrari, the trustee is probably going to sell it. A portion of the proceeds from the sale will then likely be handed to you for the purchase of a more practical option.
What Can You Keep?
The goal of the Chapter 7 bankruptcy process isn't to leave you incapable of living your life. You'll have the opportunity to ask the court to allow you to retain the basic elements of a normal life, such as furniture, clothing, dishes, and silverware. As with the example of a luxury car, though, the court may sell high-end items and pay you a portion to replace them with something a little further from the top-tier goodies.
Depending on the state where you file, you may be able to hold onto some luxury items, too. Petitioners in some states can use a wildcard exemption to hold onto certain assets. Understandably, the laws in these states usually limit these exemptions to a few thousand dollars worth of stuff.
Can You Keep Your House?
If you're exclusively pursuing a Chapter 7 bankruptcy and your house is mortgaged, you can't keep the house. Mortgaged properties are secured assets, and creditors can repossess them. However, you might be able to file a separate restructuring proposal to keep the house according to a payment plan.
Low-Value and Inconvenient Assets
The trustee has the authority to not sell assets that would be of little value or very difficult to sell. You won't have any say in this choice, but you probably also won't object if it happens.
To learn more, contact a Chapter 7 bankruptcy attorney.
Share16 October 2020
