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If you are completing for chapter 7 bankruptcy protection, you are probably aware that bankruptcy law outlines a unique list of exempt property. This means that, as a chapter 7 bankruptcy debtor, you are allowed to retain property classified since exempt while filing with regard to liquidation bankruptcy. However, which means that all non exempt property is at risk of inclusion in the bankruptcy estate. I am commonly asked to describe the procedure behind coping with non-exempt property in personal bankruptcy.
When a bankruptcy attorney prepares ones chapter 7 petition, they are going to include a detailed listing of your personal property house. They will make every attempts to protect these assets by using Arizona bankruptcy exemptions to your property listed. The list is reviewed with the assigned chapter 7 chapter 13 trustee, who will determine whether the debtor is in property of significant non-exempt house.
Lets imagine you listed an asset on the bankruptcy petition that can not be shielded by an Arizona bankruptcy exemption. The bankruptcy trustee may or may not decide to recover this asset contained in the bankruptcy estate. If the item has little resale benefits, or would be difficult to recuperate and sell, the trustee may decide to do nothing. This means that you get to keep the item.
If the trustee believes the sale of said asset might benefit the bankruptcy residence, they may request you surrender the item. The cutoff value that a trustee will consider a great asset worthwhile to pursue is a bit of a bankruptcy grey zone. While Ive seen trustees ignore assets worth several thousand dollars, I have additionally seen a trustee continue an asset worth approximately $250, and located a few states away.
When there is if the trustee requests I surrender a non exempt asset to your bankruptcy estate. At this aspect, you have two options. The first option is to relinquish the item to the trustee for inclusion in the bankruptcy estate. The trustee will sell the item with an auction sale, and include proceeds as part of the bankruptcy estate. This is usually eventually distributed among creditors.
The second option is to purchase that from the trustee. It may look like strange to purchase a product or service you already own, but remember that this asset is considered property of the bankruptcy estate. Some trustees will allow you to purchase the item directly, usually at a discount from estimated resale cost. Other trustees allow that you place a bid on the item, which allows it to remain in your possession till time of auction, at which time your bid is entered on your behalf. However, you must still attend and bid at the auction, to ensure that you win the item.
The right application of Arizona chapter 13 exemptions is one area by which it is helpful to talk to an experienced bankruptcy lawyer. As always, I am available for free bankruptcy consultations within my Phoenix and Casa Grande locations.
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