If You Have Nonexempt Property
Even if you have property that isn’t protected by an exemption, you may be able to keep it. First of all, you will get to keep it if it isn’t the time and money the trustee would spend taking it and selling it. For example, if you own a second car that’s worth $5,000, and you still owe $4,500 on it, the Chapter 7 bankruptcy trustee might decide not to take it. Once the trustee pays the costs of repossessing, storing, and selling the car, what’s left will probably be only enough to cover your car note. Your other creditors won’t get anything out of the deal. Similarly, if you own property that just isn’t worth much , the trustee probably won’t bother to take it.
If your nonexempt property is worth more, you may be able to negotiate with the trustee to keep it, but you’ll have to give something up in exchange. If you have exempt property you don’t need, you might be able to trade that so you can keep your nonexempt property. For example, if you really want to keep your nonexempt darkroom equipment , you might offer to give the trustee an antique armoire worth about the same amount, even though you’d otherwise get to keep it as exempt furniture.
You can also offer to “buy back” your nonexempt property, if you can come up with enough cash to pay about what your creditors would have received if your property were taken and sold. You could borrow the money, use your income to pay, or sell exempt property.
Dealing With Debt Collectors
Federal law dictates how and when a debt collector may contact you: not before 8 a.m., after 9 p.m., or while youre at work if the collector knows that your employer doesnt approve of the calls. Collectors may not harass you, lie, or use unfair practices when they try to collect a debt. And they must honor a written request from you to stop further contact.
What Debts Cannot Be Discharged In Bankruptcy
The following debts cannot be discharged in either a Chapter 7 or a Chapter 13 bankruptcy case. If you file Chapter 7, you will still owe these debts after your case is over. If you file Chapter 13, these debts will either be paid in full during your plan, or the balance will remain at the end of your case.
Nondischargeable debts include:
- Unlisted debts, unless the creditor had knowledge of your bankruptcy filing.
- Recent income tax debt and other tax debt.
- Fines imposed for violating the law.
- Student loans, unless you can show that it will cause a hardship for you to repay them.
- Debts you owe under a divorce decree or settlement.
In a Chapter 7 and 13 case, a creditor may object, and a judge may agree, to theseadditional debts being discharged:
- Debts incurred by embezzlement, fraud, or larceny.
- Certain credit purchases made within 90 days or cash advances made within 70 days of filing.
- Restitution or damages awarded in a civil action for willful or malicious injury to a person.
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How Much Does It Cost To File Bankruptcy
There is a filing fee that must be paid to the court upon filing of your petition. For a chapter 7, that fee is $306.00, and for a chapter 13, the fee is $281.00. In limited instances, you can file a motion to waive the filing fee, or at least to make monthly payments of the filing fee, in 3 or 4 equal installments. You must also pay for the pre- and post- filing credit counseling courses. Of course, if you hire an attorney to represent you, you will have to pay their fee.
Can I Keep My Home After Filing Bankruptcy
By FindLaw Staff | Reviewed by Maddy Teka, Esq. | Last updated May 19, 2021
The answer, like so many others in law, is that “it depends.” Most people that declare bankruptcy can keep their houses throughout the process, but some are not.
Keeping your home is often the biggest worry about filing for bankruptcy â and which Chapter to file for. This article will give you some useful information so you can know what to expect.
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Dealing With Your Vehicle
One of the forms you will file with the bankruptcy court is called the Statement of Intention. In this form, you tell the court what you plan to do with property that is securing a debt you owe, like real estate or a vehicle.
If you own your vehicle but are still paying on the loan, you have a few options on how to deal with it in Chapter 7 bankruptcy.
Reaffirmation
You can reaffirm the debt, keep your vehicle, and continue making payments. This means the debt will not be discharged and you will continue making monthly payments during and after bankruptcy. If you miss future payments the lender will have the right to repossess the vehicle and possibly try to collect on any deficiency between the balance you owe and the amount they get when selling the vehicle.
If you select this option in your Statement of Intention, your car lender will send you a reaffirmation agreement for you to complete and return. In some bankruptcy cases a reaffirmation hearing will be scheduled.
Surrender
If you choose to surrender your vehicle, then it will be repossessed and the debt will be discharged in your bankruptcy. Filers with high car payments they can’t afford often choose to surrender their car to get out of the debt.
Redemption
In Indiana What Property Can I Keep
In a chapter 7 case, you can keep all property which the law says is exempt from the claims of creditors. Indiana exemptions provides a list of the exemptions available for Indiana. In determining whether property is exempt, you must keep a few things in mind. The value of property is not the amount you paid for it, but what it is worth now. Especially for furniture and cars, this may be a lot less than what you paid or what it would cost to buy a replacement. You also only need to look at your equity in property. This means that you count your exemptions against the full value minus any money that you owe on mortgages or liens. For example, if you own a $50,000 house with a $40,000 mortgage, you count your exemptions against the $10,000 which is your equity if you sell it. While your exemptions allow you to keep property even in a chapter 7 case, your exemptions do not make any difference to the right of a mortgage holder or car loan creditor to take the property to cover the debt if you are behind. In a chapter 13 case, you can keep all of your property if your plan meets the requirements of the bankruptcy law. In most cases you will have to pay the mortgages or liens as you would if you didnt file bankruptcy.
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What Assets Are Exempt From Bankruptcy In Ontario
When you file for bankruptcy in Ontario, you dont need to be concerned that you will lose everything. These assets are exempt under federal and provincial law:
What Doesnt Bankruptcy Do
Bankruptcy cannot, however, cure every financial problem. Nor is it the right step for every individual. In bankruptcy, it is usually not possible to:
- Eliminate certain rights of secured creditors. A secured creditor has taken a mortgage or other lien on property as collateral for the loan. Common examples are car loans and home mortgages. You can force secured creditors to take payments over time in the bankruptcy process and bankruptcy can eliminate your obligation to pay any additional money if your property is taken. Nevertheless, you generally cannot keep the collateral unless you continue to pay the debt
- Discharge types of debts singled out by the bankruptcy law for special treatment, such as child support, alimony, certain other debts related to divorce, some student loans, court restitution orders, criminal fines, and some taxes.
- Protect cosigners on your debts. When a relative or friend has co-signed a loan, and the consumer discharges the loan in bankruptcy, the cosigner may still have to repay all or part of the loan. Discharge debts that arise after bankruptcy has been filed.
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When Your House Isn’t Exempt
Ordinarily, in a Chapter 7 bankruptcy, you must relinquish any nonexempt property to the bankruptcy trustee responsible for administering your matter. However, just because you can’t protect all of your equity doesn’t necessarily mean that you’ll lose your property.
Most Chapter 7 trustees won’t attempt to liquidate nonexempt property unless the effort nets a meaningful payment on your unsecured debt, such as credit card balances, personal loans, and medical and utility bills. In other words, after the trustee pays out the required amounts, there must be money left over. So, although there are no hard and fast rules when deciding whether to liquidate your home for the bankruptcy estate, the trustee will consider the following:
- the appraised value of the property
- costs of sale, including sales commissions, necessary repairs, inspections, etc.
- balances on any mortgages
- the existence of other liens, like tax liens, outstanding property taxes, mechanic’s liens, etc.
- whether the proceeds will be split with a co-owner
- how long the property will be on the market
- amount of the trustee’s commission, and
- amount of unsecured debt you owe.
In Many Cases You Can Keep Your Home In Chapter 7 Bankruptcy Learn More Here
By Cara O’Neill, Attorney
You won’t necessarily lose your home in Chapter 7 bankruptcyespecially if you don’t have much home equity and your mortgage is current. Whether you can keep your home after filing for Chapter 7 bankruptcy will depend on the following factors:
- whether your mortgage is current
- if you’ll be able to continue making the payments after bankruptcy
- how much equity you can protect with a homestead exemption, and
- the amount of equity in your home.
If you’re behind on your payment, in foreclosure, or have more equity than you can protect, you’ll have a better chance of keeping your home in Chapter 13 bankruptcy. Filers faced with those circumstances should learn more about choosing between Chapter 7 or Chapter 13 when keeping a home.
For step-by-step guidance through the bankruptcy process, read What You Need to Know to File for Bankruptcy in 2021.
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Chapter 7 Vs Chapter 13 Bankruptcy
There are two types of bankruptcy for individuals: Chapter 7 bankruptcy and Chapter 13 bankruptcy:
- Chapter 7 Bankruptcy: Liquidation bankruptcy that wipes out the most unsecured debt as possible without the need to pay back through a repayment plan.
- Chapter 13 Bankruptcy: Also known as a wage earners plan. It allows the person with regular income to develop a strategy to repay all or part of their debts. Chapter 13 bankruptcy involves a repayment plan for over three to five years.
Chapter 7 bankruptcy allows you to keep your home if 1) you are current with your mortgage payments when you file for bankruptcy, and 2) your state laws approve of the bankruptcy exemption. There is a good chance youll lose your home if you are behind on mortgage payments.
Meanwhile, Chapter 13 bankruptcy may provide a grace period to catch up on mortgage payments if you are behind. If you can reach an agreement with the courts regarding a repayment plan, you may save the home.
Regarding your automobile, most chapter 7 cases allow you to keep the vehicle if you are current with payments. The same is true of chapter 13 situations, even if you are behind on loan payments. However, in both cases, expect a tighter leash from the lender and the potential to have to reaffirm the debt with a new agreement.
Farming Fishing And Aquaculture Exemptions
- If your primary occupation is farming, personal property used by you to earn income are exempt up to $10,000
- If your primary occupation is fishing, personal property used by you to earn income are exempt up to $10,000
- If your primary occupation is aquaculture, personal property used by you to earn income are exempt up to $10,000
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Learn How To Eliminate A Personal Guarantee In Bankruptcy
By Cara O’Neill, Attorney
When you guarantee a loan for your business, friend, or family member, you make yourself liable for it. Luckily, you can usually wipe out your personal liability for debt through bankruptcyincluding a personal guarantee entered into for your business. Read on to learn more about personal guarantees, including:
- why people sign personal guarantees
- eliminating a personal guarantee in bankruptcy
- why bankruptcy won’t get rid of most liens, and
If you’re a business owner, learn more about bankruptcy and small businesses.
How Long Will Selling The Home Take
Trustees will typically sell the home in a timely fashion. Generally, an individual remains bankrupt for 3 years. Trustees are required by law to sell a home within 6 years after an individuals bankuptcy ends. This allows 9 years to arrange the sale. If the trustee does not sell the home within this period, ownership of the home could be returned to the individual.
The 6 year rule only applies if the trustee is aware the home exists. If a home is not disclosed in the bankruptcy documents, the trustee will have 20 years to take possession and sell the home.
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Finding The Best Approach For You
Whether youre struggling with other debt and concerned about putting your house at risk or youre trying to save your home from foreclosure, the right answer will depend on a variety of factors. Some of the most important include your goals and priorities, whether you are behind on your mortgage loan, whether you have adequate income to catch up and stay on track, what other debts you have, and how much equity you have in your home.
To discuss your situation with an experienced bankruptcy attorney and learn more about your options, schedule a free consultation right now. Just call 877-581-3396 or fill out the contact form in the right-hand sidebar of this page.
Will I Lose My House Will I Lose My Car
If you are thinking of filing for bankruptcy, you likely have some big questions about how it will affect you. For instance, Will I lose my house and car or are any of my assets exempt from bankruptcy in Alberta?. In this article, we look at the Alberta bankruptcy exemptions and put our heads together in the hope of answering your most pressing questions when it comes to bankruptcy and clarifying misconceptions about losing everything. If you want more information at the end, feel free to reach out to us at Goth & Company for further advisement.
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Protecting Your Home Equity In Chapter 7 Or Chapter 13 Bankruptcy
Start by determining whether you can protect all of your home equity in bankruptcy. You must complete this critical step in both Chapter 7 and Chapter 13 bankruptcy.
In both bankruptcy chapters, you protect an asset with a bankruptcy exemption. Each state has a list of exemptions, so the property type and amount of equity you can protect using state exemptions varies widely.
Only a few states let you keep all of your home equity when you file bankruptcy. Most states have a much lower “homestead exemption.” Here’s how the homestead exemption works in chapter 7 and 13.
What Can Bankruptcy Do For Me
Bankruptcy may make it possible for you to:
- Eliminate the legal obligation to pay most or all of your debts. This is called a discharge of debts. It is designed to give you a fresh financial start.
- Stop foreclosure on your house or mobile home and allow you an opportunity to catch up on missed payments.
- Prevent repossession of a car or other property, or force the creditor to return property even after it has been repossessed.
- Stop wage garnishment, debt collection harassment, and similar creditor actions to collect a debt.
- Restore or prevent termination of utility service.
- Allow you to challenge the claims of creditors who have committed fraud or who are otherwise trying to collect more than you really owe.
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Is It Possible To Keep All My Assets And Settle My Debts
Absolutely! When it comes to settling your debt in Canada, bankruptcy is typically a last resort. Your Trustee will do everything they can to find a better alternative for you. The good news is, you can settle your debts and keep your assets. In particular, consumer proposals allow you to repay your debts for significantly less than you owe while maintaining control of your assets.
In Canada, a consumer proposal is the only legally binding way to settle your debts for less you owe. Proposals must be administered by a Licensed Insolvency Trustee. Your LIT will create a proposal for repayment of up to 70% less than you currently owe, free of interest. Your personal circumstances, family size, and financial history will all be factors in the offer. All your debts will be consolidated into monthly installments, which can be arranged for anywhere from 5 months to 5 years you decide. You get to keep all your assets, and you receive immediate creditor protection. Say goodbye to the stress and worry of collection calls and having your paycheck garnished. Want to know more? Contact a Licensed Insolvency Trustee today!
