What Assets Do I Keep After Declaring Bankruptcy
If you file under Chapter 13, you are entitled to hold on to all of your property and assets as long as you keep up with your court-approved repayment plan. If you file under Chapter 7, you can keep any exempt assets under state bankruptcy laws.
Keep in mind that if you have lived in North Carolina for less than two years then the exemptions you claim may be the Bankruptcy Code exemptions or the exemptions of the state you came from. North Carolina bankruptcy exemptions allow you to keep the following types of property when you file under Chapter 7:
Will I Lose My House
Whether or not you will lose your house depends on the value of your house, and the amount owing on your mortgage. Most people that declare bankruptcy in Ontario and own a house will have a mortgage on the house.
The Ontario Execution Act stipulates that your principal residence is exempt from seizure IF the equity in your home does not exceed $10,783. If the equity does exceed $10,783 then your principal residence is subject to seizure and sale.
In that case you are required to pay the equity in your house if you go bankrupt. . For more information read our FAQ What Happens To My House In A Bankruptcy?
What Happens To Your House
Youll notice that housing is a glaring omission from the list.
Does this mean you lose your house if you go bankrupt in Ontario?
The answer is yes and no.
It depends on the circumstances, primarily revolving around two factors:
- The value of your home
- How much money you have left on your mortgage
If your home equity is under $10,000, you can keep your property.
If it is higher than this, it can be seized and sold to appease your creditors.
Unless you find another way of paying the equity, which is highly unlikely if it exceeds $10,000.
Need help with bankruptcy in Ontario?
Filing for bankruptcy is a complex process that requires the help of a Licensed Insolvency Trustee.
We can help you deal with the entire bankruptcy process and allow you to get a fresh start.
Well guide you through all the rules and regulations, ensuring you hold onto as many things as you legally can.
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Contact A Bankruptcy Attorney In Cary Nc For A Free Consultation
At Sasser Law Firm, we have three board-certified bankruptcy specialist attorneys and over 20 years of experience practicing exclusively in bankruptcy law. Our bankruptcy attorneys in Cary, NC are prepared to answer questions you have about the bankruptcy process, such as What happens when I declare bankruptcy? or What do you lose in bankruptcy? They strive to be as helpful and objective as possible whether that means filing for bankruptcy or not.
Contact the Sasser Law Firm today for a free initial consultation and practical advice about your options for dealing with debt.
What Creditors Can Take In A Bankruptcy
Your bankruptcy estate is made up of all your income and property that creditors could potentially get hold of. This includes all the property that you own at the time of the bankruptcy filing, as well as any income that you have earned, even if you havent received it yet.
Even some property that you dont own at the time of filing, such as an inheritance you are expecting, the proceeds of a divorce settlement or decree that you won within 180 days of filing for bankruptcy, could be parceled into your bankruptcy estate. If you are owed a tax refund, that could also go into the pool.
If you have transferred, sold or given away some property two to four years before filing for bankruptcy, and did not receive a reasonably equivalent value in payment, your creditor could lay claim to such property as well.
If you paid $600 or more in debt to a creditor within 90 days before your bankruptcy filing, or paid off $600 or more to a relative or friend in the one-year period before your filing, your creditor could also lay claim to that amount.
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Home Mortgage And Other Property Liens
If you have a lien on the property, such as a home mortgage, you cannot have the mortgage discharged in bankruptcy.
State laws vary, but you can generally keep your home in bankruptcy if you keep making the payments and if you do not have more equity in the home than you are allowed to keep by state law.
Will My Employer Find Out
Not necessarily. The most likely way would be if a creditor has sued you and is garnishing your wages. If the garnishment stops due to bankruptcy proceedings, your employer has to be notified since it cuts your checks.
But if your wages are being garnished, your employer already knows youre under financial stress and might be relieved you have filed for bankruptcy to start digging yourself out.
With Chapter 13, the court could order that payments be automatically deducted from your wages and sent to creditors. But the bankruptcy code has rules that prohibit employers from discriminating against employees based solely on bankruptcy filings.
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What Happens To Your Assets When You File Chapter 7 Bankruptcy
The vast majority of chapter 7 cases are no asset cases. However in an asset case, after you surrender your nonexempt property, a bankruptcy trustee will take the property, sell it, and use the proceeds to pay claims pursuant to the statutory scheme. If the value of an asset has been claimed as exempt then the trustee will have to pay the cash amount of the exemption to you. As long as you have met all other bankruptcy requirements, the court will grant your bankruptcy discharge.
Where To Find Your State’s Bankruptcy Exemptions
Your state’s bankruptcy exemptions are in your state code. If you’re not sure where to find your state’s statutes, we can help. We provide state exemption lists in Bankruptcy ExemptionsWhat Do I Keep When I File for Bankruptcy? Scroll down to the middle of the article for state links.
But remember, mistakes can be costly. You must read the code section itself to be sure it applies.
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What Assets Can You Lose In A Chapter 7 Bankruptcy
Bankruptcy is rarely anyones first option for dealing with debt. Nevertheless, there usually comes a time where people simply cannot pay their bills. Searching for answers, many finally confront the possibility that bankruptcy makes the most sense.
One key concern, however, is what assets they will lose. Chapter 7 bankruptcy is not a free lunch. In exchange for eliminating certain unsecured debts, debtors end up losing assets, which will be sold for the benefit of creditors. Below, our Plantation bankruptcy attorney reviews some assets many people are afraid to lose.
Homes
Theres good news for Florida residents. Our state has a generous homestead exemption that keeps a primary residence outside the reach of creditors. Even better, homeowners can exempt the full value of the homein most situations.
There are key limitations to the homestead exemption, however:
- It applies only to your primary residence. You cannot exempt a vacation home or other investment property.
- The home cant be too largeno larger than a half-acre in a municipality or 160 acres elsewhere.
- You must have owned the home for at least 1,215 days before filinga little over 3 years. If you havent, then you can only exempt up to the federal limit.
Cars
Retirement Benefits
Cash
You could definitely lose cash in a Chapter 7 bankruptcy, but it depends on the source of the money.
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Bankruptcy Exemptions On Prince Edward Island
- No limit on clothing for you and your family
- No limit on medical or health aids
- Any motor vehicle needed for transportation to work up to $6,500, or up to $3,000 if not used for work
- Household furniture, utensils, equipment, food and fuel up to $5,000
- Tools used by you in your business or trade, up to $2,000
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What Is The Procedure For Selling The Home
The process for selling the home will depend on whether your home is held in:
- sole ownership OR
Definition
Sole ownership means that only one person owns the home.
- If you are a sole owner who becomes bankrupt, the trustees name is placed on the Certificate of Title in place of your name. This is to enable the trustee to sell your home .
- The trustee will then determine if the home is to be sold. The home will likely be sold if:
- there is equity in the home and/or
- it was not purchased with protected money .
- Once the home has been sold, the proceeds from the sale will be used to repay your debts.
Your Public Records On Annulment
Youll need to check the details of the bankruptcy are removed from your credit record. If an IVA has been agreed, this will be put on your file.
You will need to apply to both Land Charges and Land Registry to have your bankruptcy entry removed from any properties you still own after paying your debts. If you do not do this, the entries will remain for 5 years.
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Explore Your Bankruptcy Options
Get the financial relief you are entitled to by filing for bankruptcy protection. Our team represents individuals and small business owners in Chapter 7 and Chapter 13 bankruptcy cases. We can also provide help filing for Chapter 11 reorganization bankruptcy and Chapter 12 bankruptcy for family farmers and fishermen.
We can help you through the petition and filing process. We can help you retain your assets when you choose Chapter 7 bankruptcy. We can even help you restructure financial debt through other bankruptcy filings with complex financial structures or extremely large debt loads. Call Farmer & Morris Law, PLLC, at to speak to a member of our client intake team and learn what happens if you declare bankruptcy today.
Chapter 7 Vs Chapter 13
Chapter 7 and Chapter 13 are the two most common types of personal bankruptcy.
In a Chapter 7 bankruptcy, a trustee appointed by the bankruptcy court will liquidate many of your assets and use the proceeds to pay your creditors some portion of what you owe them. Certain assets are exempt from liquidation. Those typically include part of the equity in your home and automobile, clothing, any tools you need for your work, pensions, and Social Security benefits.
Your nonexempt assets that can be sold off by the trustee include property , a second car or truck, recreational vehicles, boats, collections or other valuable items, and bank and investment accounts.
In Chapter 7, your debts are typically discharged about four months after you file your bankruptcy petition, according to the Administrative Office of the U.S. Courts.
In a Chapter 13 bankruptcy, by contrast, you commit to repaying an agreed-upon portion of your debts over a period of three to five years. As long as you meet the terms of the agreement, you are allowed to keep your otherwise-nonexempt assets. At the end of the period, your remaining debts are discharged.
In general, people with fewer financial resources choose Chapter 7. In fact, to be eligible for Chapter 7, you must submit to a means test, proving that you would be unable to repay your debts. Otherwise, the court may determine that Chapter 13 is your only option.
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Payments From Your Income
If you can afford it, the trustee will ask you to make regular payments towards your debts from your income through an income payment agreement . You enter an IPA voluntarily, but theres a written binding agreement between you and the trustee.
If your main or only income is state benefits, the trustee will not normally try to get an IPA.
If you cannot agree on payment amounts for an IPA, the trustee can apply for an income payment order . If you do not meet these payments, the trustee can then apply to extend your bankruptcy.
The payments will come from surplus income .This is money you have left after paying your living expenses. Normally you will have to pay all of this surplus income as your IPA payment.
Payments normally last for 3 years . The court will not make an IPO if it leaves you without enough money to meet everyday needs.
The official receiver may use private debt collection agencies to collect the payments.
A fee will be charged in all bankruptcy cases where an IPA or IPO is set up. The fee is set at £150 which will cover the specific costs incurred by the Official Receiver of arranging and setting up your IPA or IPO and will be collected from the first payments you make into the arrangement. This fee is only chargeable on cases where a bankruptcy application was made or a petition presented on or after the 21 July 2016.
What Are The Upsides Of Filing Chapter 7 Bankruptcy
Immediate relief in the form of a much-needed breathing spell.
The moment your case is filed with the bankruptcy court, youâre protected from creditors. Filing bankruptcy triggers an automatic stay – or stop – on all collection actions. This means all phone calls, garnishments, and collection letters have to stop. It even put at least a temporary stop to repossessions, evictions, and foreclosures.
Permanent debt relief in the form of a bankruptcy discharge.
Filing Chapter 7 bankruptcy wipes out most types of debt, including credit card debt, medical bills, and personal loans. Your obligation to pay these types of unsecured debt is eliminated when the bankruptcy court grants you a bankruptcy discharge.
Getting your bankruptcy discharge is virtually guaranteed.
If youâve never filed bankruptcy before, pass the means test, and are honest in your dealings with the bankruptcy court and the bankruptcy trustee, you can get your bankruptcy discharge in as little as 3 months. As long as you make sure you meet all requirements before and after filing your bankruptcy case, itâs basically automatic.
Youâll probably get to keep all of your stuff.
If you want, you can even keep your car after filing bankruptcy.
After filing bankruptcy, missed monthly payments and other negative marks on your credit report no longer hurt your credit score.
You’ll have better access to credit and banking.
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Will I Lose My Home
Generally, not under Chapter 13. Under Chapter 7, it depends on how much equity you have in house. If you have a lot of equity in it, the trustee could choose to have it sold to pay off creditors.
When you file a bankruptcy petition, you have the opportunity to exempt certain property. The type and amount of exemption available varies from state to state. This means you can normally protect a certain percentage of the equity in your house and other property. The federal maximum is usually $25,150 double that if you are married, your house is jointly owned with your spouse, and you file the bankruptcy jointly with your spouse. Though you may have the option to file bankruptcy without your spouse.
If you have less than that amount in equity, the court-appointed trustee probably wont sell your house since it wont produce enough to pay off much debt. Though, your lender can still foreclose on the house if you miss your mortgage payments.
If you have more equity than you can exempt, the trustee likely will sell your house and youll receive the exemption amount on sale. For instance, if your house is sold for $200,000, and you were able to exempt for $25,150, youd get $25,150 on sale and the rest will go to pay off your mortgage and other debts.
Other personal property that can be sold includes jewelry, antiques, appliances, furniture, books, musical instruments, almost anything of value. There are also exemptions for those items in most states.
How Bad Is Declaring Bankruptcy
Bankruptcy may help you get relief from your debt, but its important to understand that declaring bankruptcy has a serious, long-term effect on your credit. Bankruptcy will remain on your credit report for 7-10 years, affecting your ability to open credit card accounts and get approved for loans with favorable rates.
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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
Northwest Territories bankruptcy exemptions
In the Northwest Territories, property exempt from seizure in bankruptcy is set out in the Exemptions Act and applies to the equity in an asset. Equity is the difference between the value of the asset and what you owe on the asset.
Example: If you have household furniture and equipment in your home worth $5,000 and you do not owe any outstanding loans on these items, the equity you have is $5,000. In the Northwest Territories, the exemption for the total of these items is $5,000. In this case, you would be entitled to keep these possessions and your creditors cannot take them from you.
What Assets Can I Keep In Bankruptcy In New Brunswick
- Furniture, household furnishings and appliances used by the debtor or a dependent to a realizable value of $5,000 or to any greater amount that may be prescribed
- Food, clothing and fuel necessary for the debtor and his family for 3 months
- Two horses and sets of harness, two cows, ten sheep, two hogs and twenty fowl, and food therefor for six months
- Necessary tools, equipment and books to the value of $6,500 used in the practice of the debtors trade or profession
- Necessary seed grain and potatoes required for planting purposes to the following quantities: forty bushels of oats, ten bushels of barley, ten bushels of buckwheat, ten bushels of wheat and thirty-five barrels of potatoes
- One motor vehicle having a realizable value of not more than six thousand five hundred dollars at the time the claim for exemption is made, or not more than any greater amount that may be prescribed, if the motor vehicle is required by the debtor in the course of or to retain employment or in the course of and necessary to the debtors trade, profession or occupation or for transportation to a place of employment where public transportation facilities are not reasonably available
- Necessary medical and health aids
- Pets belonging to the debtor
- Pension plans
- Registered Retirement Savings Plans , Registered Disability Savings Plans and Registered Retirement Income Funds are exempt from seizure
For further details on what you can keep, book a free consultation with a Licensed Insolvency Trustee.
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