What Property Can I Keep in a Chapter 7 Bankruptcy?

If I file Chapter 7 Bankruptcy, what property may I keep?
 

The bankruptcy laws, 11 U.S.C. 522, allows a debtor to exempt, or keep certain property, listed below.  If you are married and filing jointly, you may double all of the federal bankruptcy exemptions listed below. For example, you may claim a homestead exemption of $43,250 (which is double the listed homestead exemption amount of $21,625).

Homestead:
522(d)(1), (5) - Real property, including mobile homes and co-ops, or burial plots up to $21,625. Unused portion of homestead, up to $10,825, may be used for other property, this is also part of what is called the “wildcard” exemption, and identified below.

Personal Property:
522(d)(2) - Motor vehicle up to $3,450.
522(d)(3) - Animals, crops, clothing, appliances and furnishings,  books, household goods, and musical instruments up to $550 per item, and up to $11,525 total.
522(d)(4) - Jewelry up to $1,450.
522(d)(9) - Health aids.
522(d)(11)(B) - Wrongful death recovery for person you depended upon.       522(d)(11)(D) - Personal injury recovery up to $21,625 except for pain and suffering or for pecuniary loss.
522(d)(11)(E) - Lost earnings payments.
Pensions:
522(b)(3)(C) - Tax exempt retirement accounts (including 401(k)s, 403(b)s, profit-sharing and money purchase plans, SEP and SIMPLE IRAs, and defined benefit plans).

522(b)(3)(C)(n) - IRAS and Roth IRAs to $1,171,650.

Public Benefits:

522(d)(10)(A) - Public assistance, Social Security, Veteran’s benefits, Unemployment Compensation.

522(d)(11)(A) - Crime victim’s compensation.

Tools of Trade:

522(d)(6) - Implements, books and tools of trade, up to $2,175.

Alimony and Child Support:

522(d)(10)(D) - Alimony and child support needed for support.

Insurance:

522(d)(7) - Unmatured life insurance policy except credit insurance.

522(d)(8) - Life insurance policy with loan value up to $11,525.

522(d)(10)( C ) - Disability, unemployment or illness benefits.

522(d)(11)( C ) - Life insurance payments for a person you depended on, which you need for support.

Wildcard:

522(d)(5) - $1,150 of any property, and unused portion of homestead up to $10,825.

Call Robert J. Sayfie, P.C. at 616-774-9244 or visit www.sayfie.com.

Understanding Bankruptcy Basics

Consumer Bankruptcy

When considering bankruptcy, the debtor will need to collect and present information to the attorney they retain.  This blog provides information that may assist a debtor before filing. 

Step 1:  Gather and Organize

Gather all bills, statements, invoices, promissory notes, lawsuits, and anything that looks like you owe money for review.   It is important to organize your finances and tax returns for the last two (2) years so a legal professional can analyze your bankruptcy relief options.  Don’t forget to include monies you owe or owed to you by other people, including family members. 

There are two main types of consumer debt, secured and unsecured.  A secured creditor is where collateral secures the loan.  For example a home mortgage or automobile loan is a secured debt.  An unsecured creditor is general debt you have acquired, usually credit cards, medical bills, and student loans. 

Put together a realistic monthly budget of gross income and expenses.  This is half the battle in exploring bankruptcy options so take special care in putting together accurate information in this area.  Ongoing bills such as home loans, utilities, etc. should continue to be paid if you wish to keep such items during your bankruptcy. 

Step 2:  Get Familiar with Legalese and the Bankruptcy Process

Common bankruptcy terms to get you started:

·         Bankruptcy - A legal proceeding in federal court in which an individual or business may be discharged from all or a portion of their debts.

·         Debtor - The person or business filing bankruptcy.

·         Trustee - A person ordered by the court to administer a debtor's estate.

·         Creditor – Those entities to which a debtor owes money or property. Creditors may have claims against the debtor.

·         Proof of Claim - A proof of claim is a written statement filed with the court describing the debt that a creditor claims the debtor may owe them.

The two (2) main chapters of consumer bankruptcy are as follows:

A.   Chapter 7 – Liquidation

• The purpose of a chapter 7 is to allow a person to obtain a fresh start, free from creditors and free from the pressures of over-whelming debt. Under chapter 7, a trustee may take possession of non-exempt property assets, convert them to cash and distribute the funds to creditors. After filing for relief, an individual debtor may receive a discharge of debts.
• A discharge permanently prohibits creditors from attempting to collect those debts listed by the debtor on the bankruptcy schedules. However, some debts are non-dischargeable. They include certain taxes, student loans, alimony, and child support.

B.   Chapter 13 - Individual Wage Earner

• The purpose of a chapter 13 bankruptcy is to allow an individual debtor with a regular income to pay back debts using their income and enabling a debtor to keep certain assets. A person who operates a small business as a sole proprietor may also file under this chapter.
• Under a chapter 13 bankruptcy filing, the debtor must promptly file a repayment plan and obtain the court's approval of the plan. Any creditor may object to the plan. The debtor, along with the appointed trustee, must work out any objections to the plan before the court will approve it. The typical repayment period of a chapter 13 is 3 or 5 years. The debtor makes regular payments to the trustee and the trustee distributes these monies to creditors according to the terms of the plan.
• After completion of the plan, the debts are discharged (with some exceptions) and the debtor is no longer obligated to pay them.

Call Robert J. Sayfie, P.C. at 616-774-9244, or visit www.sayfie.com

Consumer Bankruptcy: Basic Information

Consumer Bankruptcy: Basic Information

When considering bankruptcy, the debtor, whether a consumer or business, will need to present information to the attorney they retain.  This blog provides information that may assist a debtor before filing. 

Step 1:  Gather and Organize

First, you can obtain a copy of your credit report from the website of Robert J. Sayfie, P.C., or https://www.annualcreditreport.com/cra/index.  Gather all bills, statements, invoices, promissory notes, lawsuits, and anything that looks like you owe money for review.   It is important to organize your finances and tax returns for the last two (2) years so a legal professional can analyze your bankruptcy relief options.  Don’t forget to include monies you owe or owed to you by other people, including family members. 

There are two main types of consumer debt, secured and unsecured.  A secured creditor is where collateral secures the loan.  For example a home mortgage or automobile loan is a secured debt.  An unsecured creditor is general debt you have acquired, usually credit cards, medical bills, and student loans. 

Put together a realistic monthly budget of gross income and expenses.  This is half the battle in exploring bankruptcy options so take special care in putting together accurate information in this area.  Ongoing bills such as home loans, utilities, etc. should continue to be paid if you wish to keep such items during your bankruptcy. 

Step 2:  Get Familiar with Legalese and the Bankruptcy Process

Common bankruptcy terms to get you started:

·         Bankruptcy - A legal proceeding in federal court in which an individual or business may be released (or "discharged") from all or a portion of their debts.

·         Debtor - The person or business filing bankruptcy.

·         Trustee - A person ordered by the court to administer a debtor's estate.

·         Creditor – Those entities to which a debtor owes money or property. Creditors have claims against the debtor.

·         Proof of Claim - A proof of claim is a written statement filed with the court describing the debt that a creditor claims the debtor may owe them.

The two (2) main chapters of consumer bankruptcy are as follows:

A.   Chapter 7 – Liquidation

• The purpose of a chapter 7 is to allow a person to obtain a fresh start, free from creditors and free from the pressures of over-whelming debt. Under chapter 7, a trustee may take possession of non-exempt property assets, convert them to cash and distribute the funds to creditors. After filing for relief, an individual debtor may receive a discharge of debts.
• A discharge permanently prohibits creditors from attempting to collect those debts listed by the debtor on the bankruptcy schedules. However, some debts are non-dischargeable. They include certain taxes, student loans, alimony, and child support.

B.   Chapter 13 - Individual Wage Earner

• The purpose of a chapter 13 bankruptcy is to allow an individual debtor with a regular income to pay back debts using their income and enabling a debtor to keep certain assets. A person who operates a small business as a sole proprietor may also file under this chapter.
• Under a chapter 13 bankruptcy filing, the debtor must promptly file a repayment plan and obtain the court's approval of the plan. Any creditor may object to the plan. The debtor, along with the appointed trustee, must work out any objections to the plan before the court will approve it. The typical repayment period of a chapter 13 is 3 or 5 years. The debtor makes regular payments to the trustee and the trustee distributes these monies to creditors according to the terms of the plan.
• After completion of the plan, the debts are discharged (with some exceptions) and the debtor is no longer obligated to pay them.

 

Visit www.sayfie.com

 

Call 616-772-9244

 

Email: robert@sayfie.com

CAN I GET MY DRIVER'S LICENSE BACK IF I FILE BANKRUPTCY?

If your driver's license rights were revoked or suspended due to a creditor obtaining a judgment, and then the Secretary of State or Department of Motor Vehicles revoking or suspending your driving privileges, the filing of a bankruptcy stays the creditor, and voids the revocation or suspension.

So, yes, if your license was suspended for the above reasons.

If your license was suspended due to civil infractions or criminal convictions, then no.

Visit www.sayfie.com

If I file Chapter 7 Bankruptcy, what property may I keep?

If I file Chapter 7 Bankruptcy, what property may I keep?

The bankruptcy laws, 11 U.S.C. 522, allows a debtor to exempt, or keep certain property, listed below.  If you are married and filing jointly, you may double all of the federal bankruptcy exemptions listed below. For example, you may claim a homestead exemption of $43,250 (which is double the listed homestead exemption amount of $21,625).
Homestead:
522(d)(1), (5) - Real property, including mobile homes and co-ops, or burial plots up to $21,625. Unused portion of homestead, up to $10,825, may be used for other property, this is also part of what is called the “wildcard” exemption, and identified below.

Personal Property:
522(d)(2) - Motor vehicle up to $3,450.
522(d)(3) - Animals, crops, clothing, appliances and furnishings,  books, household goods, and musical instruments up to $550 per item, and up to $11,525 total.
522(d)(4) - Jewelry up to $1,450.
522(d)(9) - Health aids.
522(d)(11)(B) - Wrongful death recovery for person you depended upon.       522(d)(11)(D) - Personal injury recovery up to $21,625 except for pain and suffering or for pecuniary loss.
522(d)(11)(E) - Lost earnings payments.
Pensions:
522(b)(3)(C) - Tax exempt retirement accounts (including 401(k)s, 403(b)s, profit-sharing and money purchase plans, SEP and SIMPLE IRAs, and defined benefit plans).

522(b)(3)(C)(n) - IRAS and Roth IRAs to $1,171,650.

Public Benefits:

522(d)(10)(A) - Public assistance, Social Security, Veteran’s benefits, Unemployment Compensation.

522(d)(11)(A) - Crime victim’s compensation.

Tools of Trade:

522(d)(6) - Implements, books and tools of trade, up to $2,175.

Alimony and Child Support:

522(d)(10)(D) - Alimony and child support needed for support.

Insurance:

522(d)(7) - Unmatured life insurance policy except credit insurance.

522(d)(8) - Life insurance policy with loan value up to $11,525.

522(d)(10)( C ) - Disability, unemployment or illness benefits.

522(d)(11)( C ) - Life insurance payments for a person you depended on, which you need for support.

Wildcard:

522(d)(5) - $1,150 of any property, and unused portion of homestead up to $10,825.

Call Robert J. Sayfie, P.C. at 616-774-9244 or visit www.sayfie.com.