Exempt or Non Exempt Property
Exempt or nonexempt property is the property that a debtor has to surrender or hand over to a trustee or the properties which are protected and spared from being taken by a trustee or by the court.
When filing a bankruptcy petition, the court could allow you to keep some of your property. This property are classified as exempt properties. On the other hand, properties which are typically given up by a debtor to a trustee are called the nonexempt properties.
Most of the time, a debtor would be looking at keeping most of his/her property. In contrast, they mustalso be very careful and cautious not to keep things they are not allowed to have.
The debtor must disclose of all property to the court. If there is no full disclousure, the trustee could consider the omission as fradulent. It is very important that you talk to a lawyer to help you lan a strategy to keep most of the assets you want to keep, if possible.
Here is a list of what is often considered exempt property (depending on its value):
-Jewelry, up to a certain value;
-A portion of equity in the debtor’s home;
-Tools of the debtor’s trade or profession, up to a certain value;
-A portion of unpaid but earned wages;
-Public benefits, including public assistance (welfare),
social security, and unemployment compensation, accumulated in a bank account;
-Damages awarded for personal injury;
-Motor vehicles, up to a certain value;
-Reasonably necessary clothing; and
-Reasonably necessary household goods and furnishings
These are the most common possessions that a creditor cannot touch and get from you (again, depending on its value).
Also, a few of the non-exempt property are listed below:
-Cash, bank accounts, stocks, bonds, and other investments;
-A second car or truck;
-A second or vacation home;
-Collections of stamps, coins, and other valuable items;
-Family heirlooms; and
-Expensive musical instruments, unless the debtor is a professional musician
Normally, nonexempt property is taken by a trustee to be sold at auction or by any means of raising money to be used as payment for your debt.
Filing a bankruptcy is one way of becoming a debt free. There are risk involved and you will want to talk to a lawyer about that.
Classifying exempt and non exempt property can be difficult and one of the reasons . If you have questions about this subject, please consult our office.