Call Today (888) 668-0075

Will my property be protected in a chapter 7?

Oftentimes people come to me seeking a chapter 7 bankruptcy and they have an asset. Sometimes that asset is easily ascertainable as to the value such as real estate or a vehicle. In other cases, the asset cannot be readily determined on its face. One such example is a case where someone came with a lot of unsecured debt and no significant assets except for jewelry. The jewelry had a value of over $25,000. The debtor had ensured that jewelry for over $25,000. So in that case, that debtor cannot file a Chapter 7 and then all of a sudden state that they don't have significant jewelry. There is evidence that they insured it for over $25,000. They're going to be signing their documents under penalty of perjury that the jury is not worth very much and they are setting themselves up for a criminal complaint against them. So, when someone has significant assets, you want to make sure that you have those evaluated so that you can honestly answer the bankruptcy petition and schedules by listing their value.

When it comes to real estate, there's a little bit of wiggle room because a trustee has to sell the property which requires hiring a realtor, paying closing costs and there's a little bit more room above and beyond the exemption amount where the trustee won't touch the property.

The same is true with a vehicle. If the vehicle is a little bit over the exemption amount, the debtor may be protected because again, the trustee has to sell that item and pay someone to sell it. On the other hand, if it's money on account, if it stocks and bonds, if it's jewelry well in excess of the exemption amount, then the trustee is not going to be able to turn a blind eye to it and must administer it for the benefit of unsecured creditors.

My advice to clients is get an honest assessment or fair market value or appraisal of any particular item that you have that you feel is in excess of the exemption amount. The last thing that I want to do as an attorney is have a client lose property that could have been protected with either pre-bankruptcy planning or filing under a different chapter of the bankruptcy code.

For more help with determining whether or not you qualify for Chapter 7 and whether or not your assets are protected, contact a seasoned, experienced bankruptcy attorney in your local area.

Related Articles

Back to Chapter 7 Bankruptcy Home Page
Lawyer Chicago - Question Label
Lawyer Chicago - Equation
* Required Fields
Lawyer Chicago - Submit a review