People who are deciding if they should file a bankruptcy case often are concerned about whether they will be able to retain property that they own as they make their way through a bankruptcy case. It’s an understandable concern. Bankruptcy law sets out a list of property that is “exempt” - that is, the property can be retained by the debtor without the property being administered by the bankruptcy trustee. In chapter 7 cases, debtors have to either turn over to the chapter 7 trustee property that is not exempt or repurchase the property from the trustee.
Because there is a risk of “losing” non-exempt assets in a chapter 7, many people are tempted to take steps prior to filing a bankruptcy case to eliminate or reduce the value of their non-exempt assets. While there are some acceptable ways to reduce the amount of non-exempt assets a debtor owns, people facing the prospect of non-exempt property in their bankruptcy case should know that actively attempting to reduce or eliminate significant amounts of non-exempt assets is more trouble than it is worth. It’s good to keep these things in mind:
Keep your perspective. We’re not trying to play a game when we file a bankruptcy case. The two-fold purpose of bankruptcy is to treat creditors fairly and allow debtors to live with dignity. The person who is struggling with overwhelming debt who also owns a non-exempt fish house, or non-exempt jet ski, or who is entitled to a $6000 tax refund that can’t be protected should remember that a discharge of debts in bankruptcy is extremely valuable - and the amount of debt discharged is typically much greater than the value of the non-exempt asset that the debtor has to either turn over to the trustee or repurchase. If the benefit of receiving a bankruptcy discharge is not greater than the pain of losing a non-exempt asset, then don’t file a bankruptcy case.
The attorneys at Kain & Scott will work with you to sort out any non-exempt property issues. It’s something we do every day. Contact us to get started on getting your life back.
CONCLUSION
When the time is right, or when you are ready, reach out to Minnesota’s HIGHEST GOOGLE REVIEWED bankruptcy law firm at www.kainscott.com. You will be so glad you did!
