Exemptions are powerful property allowances that permit many debtors to keep most or all of their property in bankruptcy. However, some exemptions are limited in dollar value and cannot completely protect property from bankruptcy. Fortunately, there are options. Chapter 13 bankruptcy allows debtors to keep their property, paying an amount equal to the non-exempt value of their property over up to 5 years. In some cases, the plan will already require a greater payment amount and keeping the property will add no extra cost.
In bankruptcy, assets are valuable things that the debtor owns. Assets include physical items like houses and cars, financial assets like accounts and stocks, and even contingent asset like unasserted possible lawsuits. If it is owned and has value, might have value, or may generate value, it is probably an asset.
Frequently Asked Questions
Our frequently asked questions also address Assets:
Many debtors are able to keep their cars in bankruptcy. The basic strategies for keeping an automobile depend primarily on the value of the car, the existence and amount of a car loan, and the bankruptcy chapter chosen. Please contact our bankruptcy attorney to discuss the particulars of your situation.
We have discussed Assets in the following posts on our bankruptcy blog:
Part of filing bankruptcy is making a detailed disclosure of assets owned. Here are 10 reasons, in no particular order, why not disclosing an asset to your bankruptcy attorney and in the official schedules is a bad idea.
Earlier, we listed several reasons why it is important to disclose your assets in bankruptcy. Fortunately, most people filing bankruptcy are honest hard working people who have no interest in cheating the system. They just want the relief they are entitled to under the law, with a minimum of fuss. Most asset non-disclosures are accidental, sometimes because it did not occur to the debtor that the item was actually an asset.
Not so much a legal term as it is common vernacular, "heir property" is land, homes, or other real property where the record owner is deceased, but no formal process (such as probate) has been used. Ownership vests in the heirs by operation of law, some of whom might have possession and use of the property, but the state of record title is left unresolved. Sometimes, years or even decades go by with "heir property" becoming co-owned by an increasing number of heirs of the original owner.
For many North Carolinians, annual tax refunds play a valuable role in the household budget. When contemplating bankruptcy, it's worth considering how the bankruptcy process interacts with the receipt of tax refund payments.
In pre-bankruptcy planning, exemptions--certain statutory property allowances--are of significant consequence. A debtor whose property fits the exemptions well may be able to file chapter 7 without losing any property, while a debtor whose property doesn't fit the exemption pattern may have to turn over thousands of dollars worth of real or personal property. In the case of the North Carolina exemptions, the exemptions reflect a public policy choice by the General Assembly. In essence, the legislature has decided what a bare minimum amount of property each person should be able to have free of their creditors-at-large in order to maintain a basic lifestyle.