When I file for bankruptcy, will I have to give up my assets
The U.S. Bankruptcy Code provides a list of the total value for certain types of assets that can be protected from being seized and/or turned over to the Trustee that is assigned to administer your bankruptcy case. The protection of those specific assets is commonly referred to as your “exemptions.” The Trustee is the person assigned to oversee the administration of your bankruptcy case. The Trustee is a third party that determines whether you have any assets that are not protected (i.e. exempt) under the U.S. Bankruptcy Code. In the event you have assets that are not exempt, the Trustee may seize and liquidate these assets and, after deducting their administrative fees, will distribute the remaining proceeds of this liquidation and/or sale to your unsecured creditors.
What are asset exemptions in bankruptcy
These are statutorily defined, either by state of Michigan law or the U.S. Bankruptcy Code. Exemptions are value limits for certain assets that you may keep during and after your bankruptcy process. Prior to filing for bankruptcy protection, you should consult with an experienced bankruptcy attorney to determine whether you may be able to keep your assets.
If my assets are not exempt or protected, what does it mean that these assets are “exposed”
This means that the Trustee may seize or demand that you turn these unprotected/non-exempt assets over to the Trustee. Then, the Trustee would liquidate and/or sell the assets and distribute on a pro rata basis the proceeds from these sales to your unsecured creditors.
Why would the Trustee take my assets
The Trustee is a person assigned to administer your bankruptcy. Whether you have filed for bankruptcy relief under Chapter 13 or Chapter 7 of the U.S. Bankruptcy Code, the Trustee determines whether you have any assets that are not exempt and are therefore exposed to liquidation by the Trustee. Bankruptcy is a type of debt resolution. Not everyone qualifies for bankruptcy. Before filing for bankruptcy relief, you should consult with an experienced Michigan bankruptcy lawyer to determine whether you have assets that exceed the value limits imposed by the exemption limits.
What is pro rata basis
For those unsecured creditors who file a Proof of Claim, the creditor’s percentage of the total amount of unsecured debt determines the amount of their distribution of the proceeds from the Trustee’s liquidation and/or sale of your assets.
Where can I find the exemption limits
These federal exemptions can be found in the U.S. Bankruptcy Code. However, the values are subject to change and revision. These revisions are reported by the Code of Federal Register (CFR.) You should consult with an experienced bankruptcy attorney to determine the current dollar amounts for asset or property exemption limits.
Can I keep my house in bankruptcy
The answer to this question depends on the specific facts of your situation, such as the amount of equity you have in your home and whether this house is your sole residence. You should consult with an experienced debt relief and bankruptcy attorney prior to filing a bankruptcy. There are many considerations that an experienced bankruptcy lawyer in Michigan will be able to identify for you to answer this question. Often, the filing of a bankruptcy petition will bring a rapid stop to mortgage foreclosure proceedings.
Can I keep my cars in bankruptcy
The U.S. Bankruptcy Code allows for a certain amount of equity of one car per debtor. You should consult with a debt relief lawyer to determine whether your asset protections include your car. In addition, the bankruptcy lawyer should advise you about reaffirmation considerations.
Will I have to give up my timeshare
Generally, you should plan to surrender your interests in a timeshare property. However, you should discuss options with your bankruptcy attorney to discuss exemption and assumption/reaffirmation considerations for any timeshare property.
Will I be able to keep my wedding ring and/or my engagement ring
The U.S. Bankruptcy Code allows for some value of jewelry to be exempt. Your attorney will review all of the federal exemptions with you to determine whether your jewelry is exempt or may be unprotected.
What could happen if I give away or sell all of my assets before I file bankruptcy
DO NOT GIVE AWAY OR SELL your assets or property before filing for bankruptcy. The U.S. Bankruptcy Code includes provisions whereby this may be considered fraudulent conveyance or transfer. There are severe consequences for intending to sell, gift, give away, or sell assets or property for less than fair market value—especially to a friend or relative—in order to qualify for bankruptcy or to protect your assets from your creditors. Even if you sold property or assets to a purchaser in good faith (not intending to commit fraud/concealment or undermine the court) for fair market value, you should discuss this with an experienced bankruptcy attorney before taking any action.
Will I be able to keep my child support and/or spousal support money
That depends on the actual terms of how long and whether these support payments are ordered. Generally, your receipt of support payments will be considered as part of your monthly income for purposes of your “Means Test” and Schedule I of your bankruptcy pleadings. HOWEVER, there are types of “support” payments that are not payments protected by the child support and spousal support exemptions provided by the U.S. Bankruptcy Code. You should consult with a well respected bankruptcy lawyer in Michigan to determine whether the “support” payments you receive are exempt under the U.S. Bankruptcy Code.
Will I be able to keep my 401k and/or retirement plan
An experienced bankruptcy attorney will be able to identify whether your retirement funds, plans, and investments are exempt under the Federal Bankruptcy Code. While the Code identifies several retirement plan exemptions, the Courts have issued various opinions to answer many retirement/annuity exemption questions. Since every case is different, it is important to ask your lawyer about your specific case.
As you can see, bankruptcy is a complicated and complex federal law process. Because of this, we recommend always having an experienced Bankruptcy attorney assisting you. Your lawyer will be able to explain the answers to all of your questions.
