Bankruptcy is designed to get rid of huge amounts of debt in order to get you a fresh financial start. However, this can be unfair to the creditors if they are unable to receive anything in return. Thus, in case of Chapter 7, your non-exempt property is liquidated, and the proceeds distributed among your creditors; while in case of Chapter 13 bankruptcy, a repayment plan is devised based on your disposable income. While filing for bankruptcy, you are expected to list all your assets in the bankruptcy petition. This allows the bankruptcy trustee to find out which of them is exempted and which must become a part of your bankruptcy estate. Those assets which cannot be exempted through either state or federal exemptions, become part of your bankruptcy estate and are liquidated to pay the creditors.
Any asset must be listed accurately in your bankruptcy petition along with why it is exempted if you wish to keep that asset, say lawyers of Dallas based bankruptcy law firm https://www.recoverylawgroup.com/. however, the major point of concern is what will constitute your assets and which of them can be exempted.
An asset is something which can be sold to pay off your debts. Some of the assets which are usually looked over include:
- your life insurance policies,
- any policy where you are the beneficiary,
- accumulated vacation pays,
- season tickets,
- unpaid insurance claims,
- class-action suits,
- security deposits,
- liquor license,
- divorce settlement,
- tax refunds
Sometimes, people forget that they have co-signed a loan. Since the asset is not in their name and the payments are not being made by them, it is quite common to forget about the loan. However, if the asset has any equity and you neglect to mention the loan, you can be in a bad situation. Once there is any equity in an asset you had co-signed for, it becomes your asset. The omission could be fatal if the equity is immense. In case there is no equity in the asset, it is not an issue. If what you owe on your vehicle/house is more than what it is worth, i.e. there is no equity in the property, then it is no longer an asset. You don’t need to use any exemption on said property in such case.
There is a huge confusion as to what can constitute an asset or not and what equity in the property is exempted. A bankruptcy lawyer can help you distinguish between assets and liabilities. it is vital that you disclose all the above-mentioned assets as even an accidental omission of any can have grave consequences on your bankruptcy petition. You can consult with experienced bankruptcy attorneys at 888-297-6023 to discuss the situation at hand.