Most likely, yes. In fact, 97% of those filing, get to keep ALL of their possessions. Part of the job of the attorney is to ensure that all of your property is protected by one of the legal exemptions provided by the bankruptcy code.
Property that is included in a bankruptcy estate includes:
- Any property that you own, whether it is in your possession or not (i.e. if you own something but a friend or family member is using it, it is still included in your estate.)
- Any property that you have recently given away (you can’t give things away so that they won’t be taken during a bankruptcy case. They are still included in your estate and the trustee can take it back.)
- Money paid to a preferred creditor (if you decide to pay off a creditor before you file, this money is still included in your estate and the trustee has the power to take the money back from the creditor.)
- Any property that you are entitled to, even if it is not in your possession (this includes any money or other property that you have coming, such as money owed by a customer, vacation pay from your job, payments from an insurance company, etc.)
- Property that you either inherit or win in a settlement or divorce case within 180 days of your bankruptcy filing.
Property that is not included in a bankruptcy estate includes:
-Any withheld wages and employer contributions that are made to employee benefit and health insurance plans.
-Any property that you buy or receive after you file and before your case is closed, with certain exceptions.
-Any property that is currently in your possession but doesn’t belong to you. (For example, if your friend is storing his sports car in your garage, that property does not belong to your bankruptcy estate.)
-Tax-deferred education funds
-Any pensions or retirement plans
-Property that has been pledged as collateral for a loan if the lender is licensed, and if the lender has possession of the property (such is the case for a pawn shop). With a caveat however; make sure that you did not sell or give away any property too close to your bankruptcy filing.
Retirement accounts are treated with special care and are completely protected in most situations. So you can keep your pension, your IRA, your 401K, your tax deferred annuity plan, you’re your government retirement plan, and still discharge all of that negative unsecured debt. Don’t worry if you do not know what kind of retirement plan you receive through your work place. Your employee administrator will be very familiar with the section of the IRS code associated with your plan.
Understand that the bankruptcy laws want you to be able to pay your day to day bills while keeping some savings for any emergency that may arise. For this reason, the federal code allows you to have up to 12,000 US dollars as a wildcard exemption. This means that as long as you do not have equity in a house car or other items that exceeds the exemption amount for that item, you can use the entire wildcard exemption on cash. What you need to know is that the bankruptcy code has exemptions for different items such as equity in your home, equity in your car, household goods, jewelry just to name a few. At Seelinger Law we are adept at maximizing your exemptions so that you can get a fresh start without having to give up anything.
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