If you’re in the middle of a bankruptcy filing, you might be worried about your assets. Is the court going to take your house? Are you going to be homeless because you filed for bankruptcy? In most cases, the answer is no. The following explains a bit more about nonexempt and exempt assets during bankruptcy.
What Are Nonexempt Assets?
Any property that can be sold by the court is a nonexempt asset. The court does this to find the money to pay off some of your debts. If you’re filing Chapter 7 bankruptcy, this will almost always happen. Each state considers different types of property as nonexempt assets, but the following are some items that could be sold to pay your debts.
- A secondary or vacation home
- Expensive clothes
- A new car that has acquired equity
- Expensive pieces of art
- Expensive musical instruments
- Expensive jewelry
Of course, if these items are used as your livelihood, they typically won’t be sold. For example, if you are a limousine driver, the court probably won’t sell your limousine. If you are a musician who performs at events, the court probably won’t sell your expensive instrument.
What Are Exempt Assets?
Certain pieces of property are exempt from being sold by the court. Again, this varies by state, but some examples include:
- A car needed for work
- Necessary clothes and furnishings
- Home equity, up to a certain value
- Personal injury damages
- Public assistance benefits
As you can see, these exempt assets are typically the things a person would need to sustain life. Not necessarily a glamorous life, but just to have the basics needed to survive and thrive.
Is There a Way to Protect Your Assets?
If you’re worried about certain assets getting sold to pay your creditors, you might consider not filing for bankruptcy. If you can sell assets on your own to pay your bills, you get to choose what you keep and what you get rid of. It will require a lot more time and effort on your part, but it may be the better option if you’re worried about losing certain items.
Contacting a Lawyer for Assistance
Being faced with bankruptcy can be a bit intimidating, especially if you are possibly going to lose something of importance to you. If you’re about to file bankruptcy, speak with a lawyer first to determine what options you have. Contact a bankruptcy lawyer in Melbourne, FL today for the assistance you need.
Thanks to the Law Offices of Arcadier, Biggie & Wood for their insight into bankruptcy law and assets.