FILING BANKRUPTCY DOES NOT MEAN YOU WILL LOSE EVERYTHING!

On May 10, 2012, in Bankruptcy, by Robbie L. Vaughn, Esq.

Bankruptcy Exemptions

INTRODUCTION TO BANKRUPTCY EXEMPTIONS: FILING BANKRUPTCY DOES NOT MEAN YOU WILL LOSE EVERYTHING.

People are not required to forfeit all of their property when they file bankruptcy. Bankruptcy laws are intended to use individuals’ property to satisfy as many debts as is reasonably possible. The process is not intended to pauperize people. In order to avoid this result, bankruptcy law exempts certain property, up to a maximum value, from the bankruptcy estate. Property that is exempt from the estate is not forfeited in the bankruptcy. That means individuals may keep the exempt property even after they file bankruptcy, as long as the value of that property does not exceed the statutory limit. Federal law allows states to replace the federal exemption scheme with their own. New York allows individuals to choose between federal and state exemptions. Both federal and New York law essentially exempts the same types of property, but the two laws place different limits on each type. This means that people may be able to keep more of their property under one law rather than the other, depending on the types of property they own at the time they file bankruptcy.

Exempt property generally falls under five categories:

1. Basic Necessities and intimate personal items: This category includes personal items such as wedding rings, religious texts, domestic animals, a certain amount of cash, and a home (up to a maximum value).

2. Insurance policies and annuities: Payments individuals receive from insurance claims or annuities may be exempt. This means that after individuals file bankruptcy, they may still receive, for example, payments received under a life insurance plan taken out on a deceased spouse.

3. Motor Vehicles: Individuals may keep an automobile, as long as its value does not exceed a certain limit.

4. Benefits: Benefits such as social security, unemployment, veterans and disability payments may be exempt.

5. Property due under a money judgement: Individuals that receive payments following some lawsuits – such as personal injury, wrongful death, or others – may keep this income, up to a certain value limit.

Again, property exempted under these categories may not exceed certain values, though there may be exceptions and extensions in certain situations. The topic of bankruptcy exemptions is very complicated, and some issues are disputed even among experts. For more information on exemptions, see our earlier posts Changes to NY Bankruptcy Exemptions and Federal Bankruptcy Exemptions & NY .

If you have any questions about bankruptcy and would like to speak to an attorney, please call the Law Firm of Vaughn, Weber & Prakope, PLLC at (516) 858-2620 today to schedule a free consultation.

Bankruptcy and Exempt Property

On August 13, 2010, in Bankruptcy, by Robbie L. Vaughn, Esq.

Exempt Property

What is Exempt Property?

Exempt property is property that is protected by law from the claims of creditors. However, if exempt property has been pledged to secure a debt or is otherwise encumbered by a valid lien or mortgage, the lien or mortgage holder may claim the exempt property by foreclosing upon or otherwise enforcing the creditor’s lien or mortgage.

In bankruptcy cases, property may be exempt under either state or federal law. However, NY has opted out of the federal law exemptions. Exempt property typically includes all or a portion of a person’s home equity, motor vehicle equity, household furniture and personal effects.

What Will Happen to My Non-Exempt Property If I File Bankruptcy?

Non exempt property is part of your bankruptcy estate and is subject to sale by the bankruptcy trustee (the debtor is entitled to receive any exempt portion of the sale proceeds).  However, even if your property is not fully exempt, you may be able to keep it if you pay its non-exempt value to your creditors in a chapter 13 bankruptcy.

Also, you could agree to pay the trustee an amount that would allow you to, in essence, buy back the non-exempt property. The money that you pay to the trustee will be distributed to your creditors.  You may also be able to “trade” exempt property for non-exempt property.

Essentially, you allow the trustee to take and sale exempt property to avoid losing non-exempt property.  There are additional options available.  A knowledgeable bankruptcy attorney will be able to assist you with “exemption planning .”

Call (516) 858-2620 to arrange a FREE  consultation with a bankruptcy attorney!

Please visit our Bankruptcy category to learn more about filing bankruptcy.

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Will I Lose My House or Car If I File Chapter 7 Bankruptcy?

On July 15, 2010, in Bankruptcy, by Robbie L. Vaughn, Esq.

Will I lose my home or car if I file for chapter 7 bankruptcy?

Usually not.

In most cases you will not lose your home or car during your bankruptcy case as long as you can exempt the equity, if any exists, in your home or car. In New York, a person is currently allowed a fifty thousand dollar ($50,000.00) homestead exemption and a twenty-four hundred dollar ($2,400.00) motor vehicle exemption. If the property is exempt it may not be taken by the trustee.

However, bankruptcy does not automatically make a valid lien, mortgage or other security interest go away.  Therefore, if you don’t make your payments on that debt, the creditor may be able to take and sell your home or car, during or after the bankruptcy case. Technically, a creditor can repossess your car even if your  payments are current. The law requires you to redeem, surrender or reaffirm the vehicle (your bankruptcy attorney should advise you about this issue).

As always, The Long Island Bankruptcy Law Firm of VAUGHN & WEBER, PLLC is here to assist you.  We are conveniently located in the heart of Nassau County, Long Island, at 217 Willis Avenue in Mineola, NY 11501.  Contact us at (516) 858-2620 to arrange a consultation with a bankruptcy Attorney.

Please visit our Bankruptcy category to learn more about filing bankruptcy.

Remember:  The law often changes, and each case is different. The above is meant to give you general information, and not to give you specific legal advice.

Bankruptcy Attorney. Bankruptcy and The Automatic Stay

On May 13, 2010, in Bankruptcy, by Robbie L. Vaughn, Esq.

The Automatic Stay

The filing of a chapter 7 or Chapter 13 bankruptcy case automatically stays (stops or suspends) virtually all collection attempts (including those harassing phone calls), attachments, garnishments, foreclosures, and other actions by creditors against the person filing (the debtor) and their property.  A few days after a chapter 7 or 13 bankruptcy case is filed, the court will mail a notice to all creditors ordering them to refrain from taking any further action against the debtor.  Any creditor who intentionally violates the automatic stay may be held liable in damages to the debtor.

However, criminal proceedings and actions to collect domestic support obligations are not normally stayed. The automatic stay also does not protect cosigners and guarantors of the person filing, and a creditor may continue to collect debts from those persons after the case is filed (chapter 7) or completed (chapter 13). Also, debtors who have had one or more recent bankruptcy cases dismissed may have the automatic stay shortened or denied altogether.

Caveat: A creditor could make a motion to “lift” the automatic stay. Such a motion, if granted, would allow that creditor to continue collection efforts against the debtor or their property.

Bankruptcy Attorney in Mineola

As always, the Law Firm of Vaughn, Weber & Prakope, PLLC is here to assist you.  We are conveniently located in the heart of Nassau County, Long Island, at 393 Jericho Turnpike in Mineola, NY 11501.  Contact us at (516) 858-2620 to arrange a consultation with a bankruptcy attorney.

Please visit our Bankruptcy category to learn more about filing chapter 7 or 13 bankruptcy.

The information you obtain at this site is not, nor is it intended to be, legal advice. You should consult an attorney for individual advice regarding your own situation. This website is Attorney Advertising. It does not form an attorney-client relationship. We are a debt relief agency and a law firm that helps people file for bankruptcy relief under the U.S. Bankruptcy Code – Title 11. Prior results do not guarantee a similar outcome. Proudly assisting residents of Long Island, Nassau county, Suffolk county, New York City, Queens, Brooklyn, Bronx, Staten Island, Manhattan



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