Exempt vs. Non-exempt Property Under Chapter 7
Did you know that the right to bankruptcy is a constitutional right? It is also complex body of law, with certain state-by-state variances, and can only be safely and efficiently navigated with the assistance of an experienced advocate.
Debra Booher & Associates is one of the leading Chapter 7 bankruptcy law firms in northeastern Ohio. Lawyers at our firm file more than 2,000 bankruptcy cases per year for clients throughout northeastern Ohio, including Akron, Canton, Cleveland and Kent/Ravenna.
Call an attorney at Debra Booher & Associates for a no-obligation consultation about your Chapter 7 bankruptcy options.
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Exempt vs. Non-exempt Property Under Chapter 7
In a Chapter 7 liquidation case, the debtor must relinquish certain property to the bankruptcy trustee so that he or she can sell the property and use the proceeds to pay off debts. Property of the bankruptcy estate is broadly defined in the Bankruptcy Code. The bankruptcy estate is technically the legal owner of all of the debtor’s property and consists of all legal and equitable interests that the debtor has in property at the initiation of the bankruptcy case. Income that the debtor earns after the date of the petition is not included in the bankruptcy estate. Debtors, whether they are businesses or individuals, are often justifiably concerned about what property they will be allowed to keep and what they must give up. A bankruptcy lawyer at Debra Booher & Associates Co., LPA in Cuyahoga Falls, OH, can answer these and other questions, allay fears and keep the process moving forward as painlessly as possible.
Non-exempt property
Items that the debtor usually must forfeit include:
- Expensive musical instruments, unless the debtor is a professional musician
- Collections of stamps, coins and other valuable items
- Valuable family heirlooms
- Cash, bank accounts, stocks, bonds and other investments
- A second car or truck
- A second home or vacation home
Exempt property
A debtor must file a schedule of exempt property with the court. Exempt property is property that the debtor can protect from liquidation. The Bankruptcy Code allows each state to adopt its own exemption laws, which the debtor can select instead of the federal exemptions. It is important to consult with an attorney who can explain the exemptions available under your state’s laws and how they compare to the available federal exemptions.
Exempt property typically includes:
- Motor vehicles, up to a certain value
- Reasonably necessary clothing
- Reasonably necessary household goods and furnishings
- Household appliances
- Jewelry, up to a certain value
- Pensions
- A portion of the equity in the debtor’s home
- Tools of the debtor’s trade or profession, up to a certain value
- A portion of unpaid but earned wages
- Public benefits — including public assistance (welfare), social security and unemployment compensation — accumulated in a bank account
- Damages awarded for personal injury
Speak to a bankruptcy lawyer
If you have questions about what property you will be allowed to retain if you file for bankruptcy under Chapter 7 of the Bankruptcy Code, it is prudent to seek the counsel of an experienced and knowledgeable bankruptcy attorney. Contact Debra Booher & Associates Co., LPA in Cuyahoga Falls, OH, today to schedule a consultation.
DISCLAIMER: This site and any information contained herein are intended for informational purposes only and should not be construed as legal advice. Seek competent legal counsel for advice on any legal matter.
