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If you’re filing for Chapter 7 bankruptcy, what types of property are you allowed to keep?
David Shuster is a debt relief attorney with Shuster Law, PLLC in the Dallas—Fort Worth area. In this Quick Question, he explains important information about Chapter 7 bankruptcy exemptions, including the type of property that is typically exempt from seizure. Keep in mind that laws may vary from state to state.
To learn more, contact the attorney directly by calling 888-365-0921 or by submitting a contact form on this page.
For the most part, anything you already own you are allowed to keep, even after filing for Chapter 7 bankruptcy. While the specifics of these exemptions vary from state to state, generally you will be allowed to keep the items you already own even when filing for bankruptcy.
However, it’s a good idea to contact a bankruptcy attorney in your area before filing to make sure you are aware of what is considered exempt or nonexempt in your state. Some states require a person filing for bankruptcy to use their state exemption system, while other states such as Texas allow a filer to choose between the state exemptions and federal exemptions available; the important thing to remember is that a filer can only pick one or other.
If a filer has not lived in their current state of residence for at least two years, they might be required to use another state’s exemption system and should speak to a bankruptcy professional before filing. Bankruptcy can be a complicated process and getting help from an experienced attorney can be enormously helpful to those who don’t know where to start or are finding themselves incredibly distressed with the situation.
Although it is uncommon for someone to own a valuable piece of non-exempt property in bankruptcy, it does occur. Examples of this could be a stock account or other valuable property that was not addressed before filing. However, Shuster maintains that this situation is very uncommon. If this situation does occur, an experienced bankruptcy attorney can help you sort out what to do with that property before and during filing to ensure the process goes as smoothly as possible.
In Shuster’s own words, in most cases after addressing any non-exempt property in bankruptcy, it’s “...business as usual, as it was before the bankruptcy just without the debt.” As a general rule of thumb, if the value of a property is equal to or less than the exemption value for either the state or federal exemption system you chose, you can keep the property. However, if you own a piece of property worth more than the exemption amount for that item, it can be taken and sold, although the exemption amount will in most cases be returned to you.
To learn more, contact David Shuster directly by calling 888-365-0921 or by submitting a contact form on this page.
What property is exempt in Chapter 7? We ask Texas attorney David Shuster in this AskTheLawyers.com Quick Question.
Well I'm in Texas, in the state of Texas, we have two schemes of exemptions: federal and state. You can pick between either/or. Well, I'm not completely familiar with all the exemptions in all the states. I can tell you that Texas has a very generous set of exemptions. So, what you can expect to keep is usually what you have, what you own, already.
It's very rare to have to do something, it's pretty rare if you're in this type of situation. "Oh yeah, I forgot, I've got a stock account Edward Jones liquid money market," something that you can just go in and access at any time if you have that just sitting there for $20,000, then it does happen for some reason, but we catch it ahead of time and we talk about, Hey, you have this portion of property that you can't keep, and then we'll just discuss what you can do with it before you file or if you have to turn it over. But most cases, it's business as usual, as it was before the bankruptcy just without the debt.
Disclaimer: This video is for informational purposes only. In some states, this video may be deemed Attorney Advertising. The choice of lawyer is an important decision that should not be based solely on advertisements.