Most Chapter 7 cases are “no-asset” ones. So, what’s an “asset case,” and is it good or bad for you?
Your No-Asset Chapter 7 Case
Most individual consumer Chapter 7 cases are “no asset” ones. This means that the Chapter 7 trustee doesn’t liquidate any debtor assets.
What’s Property of the Estate under Chapter 7?
To find out if you can keep everything you own in a Chapter 7 case, the first step is finding out what’s in your bankruptcy estate.
The 5 Essentials about Protecting Your Property with Exemptions
Most of the time you get to keep everything you own when you file bankruptcy. It’s all covered by property exemptions. But not always.
Use the Property Exemptions You Qualify For
Usually you use the property exemptions available for the residents of your state. But not if you haven’t lived there long enough.
The Trustee in a Chapter 7 Case
Besides your creditors, the main person you need to be careful about in a “straight bankruptcy” Chapter 7 case is the trustee. Who’s that?
Fraudulent Transfers with the Intent to Defraud
Selling or giving away something to prevent your creditors from getting it may make a certain amount of sense but could be very dangerous.
Fraudulent Transfers
“Fraudulent transfers” have similarities to “preferences.” They are both worth understanding because they can cause unnecessary hassles.
Property Anticipated from Divorce
One special category of future assets in bankruptcy is property from a divorce–either from a property settlement agreement or court decree.
Rents and Profits in Bankruptcy
Beyond considering whether your assets have net value on the date of filing, do they generate rents, profits, or proceeds afterwards?
Assets Recovered from a Fraudulent Transfer
Which assets that you sell or give away before filing bankruptcy will be a problem, and which won’t?
Special Rules for Assets Recently Sold or Given Away
Your assets can include property and possessions that you have sold or given away before filing bankruptcy.
Special Considerations for Shared Assets
Property and possessions that you have a shared interest in can be the kind you don’t think of as yours for bankruptcy purposes.
Your Assets and the Timing of Filing a Chapter 7 Case
Pre-petition assets are “property of the bankruptcy estate,” part of your Chapter 7 case. Post-petition assets are not.
Federal Exemptions of Property Increasing
The federal exemptions are nudging up about 3%. But that only matters if you are allowed to use them, and are higher than your state ones.