They’re non-exempt assets!
Alright, it wasn’t a fantastic riddle, but it’s important information to know if you are considering filing a chapter 7.
Now, what does it mean when items are considered “non-exempt?” In Chapter 7 bankruptcy, non-exempt assets refer to properties or possessions that are not protected by Minnesota’s state exemptions and are thus subject to liquidation by the bankruptcy trustee to pay off creditors before the debts can be discharged. These assets can include valuable items such as second homes, expensive vehicles, valuable collections, stocks, bonds, and cash savings beyond a certain limit.
It makes sense that second homes and luxury cars aren’t protected, but a few common household items could surprise you.
Riding lawnmowers:
Yes, you read that right. Riding lawnmowers are not protected officially under Minnesota state bankruptcy exemptions. However, push lawnmowers are! In times like these, you can tell the laws were written by people who have never had to mow more than half an acre.
Snow blowers:
You would think that in the Great White North, a snow blower would be considered an absolute necessity. No one wants to hand shovel an entire driveway, but unfortunately, snow blowers are still considered non-exempt.
Tax Refunds:
Tax refunds are one of the more contentious assets we deal with. Unfortunately, they are property of the bankruptcy estate and will need to be turned over to the trustee to pay off what they can of your debts. The good news is that the tax refunds are pro-rated to the date you file. Say you file June 15th; only 50% of your tax refunds are bankruptcy property; the rest is yours!
Jewelry:
Minnesota statutes only protect wedding rings that were exchanged during the ceremony. The bankruptcy trustee can access all other jewelry (except for religious jewelry).
Don’t worry if you have some or all of these assets! That’s what we at LifeBack Law Firm are for! We can find ways to protect, negotiate, and keep your property where it belongs: with you! There are many options in bankruptcy for keeping non-exempt items like those above, and we’re happy to discuss those options with you.
*We use Minnesota’s state exemptions when a debtor owns real estate with equity. Why? Minnesota’s state exemptions are good at protecting your interest in your home, but federal exemptions are not. (So if you don’t own real estate, this blog doesn’t apply to you).
When the time is right, or when you are ready to get your life back, reach out to Minnesota’s most kind and helpful bankruptcy law firm by going now to www.lifebacklaw.com.