Most Chapter 7 cases are “no-asset” ones. So, what’s an “asset case,” and is it good or bad for you?
Most individual consumer Chapter 7 cases are “no asset” ones. This means that the Chapter 7 trustee doesn’t liquidate any debtor assets.
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.
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.
Usually you use the property exemptions available for the residents of your state. But not if you haven’t lived there long enough.
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?
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” have similarities to “preferences.” They are both worth understanding because they can cause unnecessary hassles.
One special category of future assets in bankruptcy is property from a divorce–either from a property settlement agreement or court decree.
Beyond considering whether your assets have net value on the date of filing, do they generate rents, profits, or proceeds afterwards?
Which assets that you sell or give away before filing bankruptcy will be a problem, and which won’t?
Your assets can include property and possessions that you have sold or given away before filing bankruptcy.
Property and possessions that you have a shared interest in can be the kind you don’t think of as yours for bankruptcy purposes.
Pre-petition assets are “property of the bankruptcy estate,” part of your Chapter 7 case. Post-petition assets are not.
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.