How Bankruptcy “Exemptions” Protect Your Property
Chapter 7 Bankruptcy is called a “liquidation.” In a true liquidation, the bankruptcy trustee assigned to your case would collect all your property, sell the property, and use the proceeds to repay your creditors. This would, in theory, leave you without clothes, without shelter, and without any belongings after the Chapter 7 “liquidation.” That would be ABSURD! So the Federal Bankruptcy Code, and the Ohio Revised Code combine to protect most – if not all – of your assets from being “liquidated.” The reason the lawmakers want to protect your assets is so you can restart debt-free with the essentials to live: Clothes, job, retirement, house, car, food, furniture, etc.
The “Exemption” Process (call a bankruptcy attorney to maximize your property protection)
1. You and your attorney fill out Schedules A/B of the Bankruptcy Petition
a. Schedules A/B list all your “Real” & “Personal” property. Everything must be listed; clothes, jewelry, cars, houses, electronics, furniture, bank accounts, etc
2. Your attorney then applies his Bankruptcy Law expertise to fill out Schedule C of the Bankruptcy Petition
a. Schedule C lists all the “EXEMPTIONS” that protect your assets from the chapter 7 “liquidation.”
3. The completed Bankruptcy Petition – including Schedules A/B & C – is filed with the court
4. The Trustee assigned to your case looks-over your schedules A/B & C to determine if any of your assets are “un-exempt” or “un-protected.” I.e. To determine if he/she can seize any of your assets to sell and help pay your creditors
5. In most cases, the Trustee is able to get ZERO assets and the debts get wiped-out without being paid anything
6. You are given a fresh start with the essentials to live and thrive!
Bankruptcy is designed to give the “honest but unfortunate Debtor a fresh start.” The “exemptions” allow Debtors to keep the tools to hit the ground running with their fresh start (car, house, clothes, job, retirement, furniture, food, etc.).
Another great thing about bankruptcy law is that you and your attorney should know EXACTLY what property you can keep BEFORE you even file the case! Your attorney should be able to accurately tell you, “You will be able to keep everything you own!!” Or “You can keep the first $4,685 of your tax refund, but the trustee has a right to the remaining $1,200.” Or “You will be able to keep everything, except asset XYZ is questionable because it’s a gray area of the Bankruptcy Code.”
Call me, Bankruptcy Attorney Lucas Ruffing, for a free consultation to determine if you can file bankruptcy and keep all your property!!