Non-exempt Property. Anything that isn't protected in bankruptcy is considered non-exempt and, in Chapter 7, can be sold by the trustee to pay off creditors.
What Constitutes an Asset in Bankruptcy? Assets refer to any property or possessions you own or have a right to own. Assets are more than a home or vehicle and include anything you own, from a stamp collection to the shoes on your feet.
Debt collectors can only take money from your paycheck, bank account, or benefits—which is called garnishment—if they have already sued you and a court entered a judgment against you for the amount of money you owe. The law sets certain limits on how much debt collectors can garnish your wages and bank accounts.
Filing for Chapter 7 bankruptcy eliminates credit card debt, medical bills and unsecured loans; however, there are some debts that cannot be discharged. Those debts include child support, spousal support obligations, student loans, judgments for damages resulting from drunk driving accidents, and most unpaid taxes.
Bank Account and Credit Report Monitoring
A court-appointed trustee can request to turn over your bank statements. Commonly, the request is authorized by a bankruptcy judge. A trustee is responsible for reviewing your assets and creating a repayment plan that fits your needs.
The trustee might find hidden assets by reviewing your debts, public records, payroll deposits, bank records, and tax returns. It's also common for trustees to investigate asset reports from a former spouse, friend, coworker, or business partner.
Household Goods and Furnishings- You are allowed to protect and keep any item of household goods, clothes, furniture not exceeding $525 in value in any particular item.
If you're unable to pay your filing fees, the court will usually try to work with you. For Chapter 13 bankruptcy, you may be able to roll your court fees into your repayment plan, paying the court in monthly installments.
An individual cannot file under chapter 13 or any other chapter if, during the preceding 180 days, a prior bankruptcy petition was dismissed due to the debtor's willful failure to appear before the court or comply with orders of the court or was voluntarily dismissed after creditors sought relief from the bankruptcy ...
Ultimately, if you can reasonably pay the taxes you owe as a result of your business closing after discharging all or most of your other obligations (including maybe some of the taxes), then Chapter 7 may well make more sense. Otherwise, you will probably need to file a Chapter 13 bankruptcy.
The Look Back Period for Chapter 7 or Chapter 13
He or she needs your bank statements to see if there have been any preferential or fraudulent transfers or luxury purchases during the look back period, which is ninety (90) days for general creditors and one (1) year for insiders like friends and family.
Can You Spend Money After 341 Meeting? If your trustee abandoned all the assets during the 341 hearing, the money and income after the meeting is yours to spend. However, it is important to be sure about the outcome of your case before spending the money.
Yes, you and your family can take a vacation.
Most people who file Chapter 7 bankruptcy can keep their checking account if the money in it is protected by exemptions. This means your account balance is safe, as long as it doesn't exceed the amount you're allowed to protect under bankruptcy law.
They have a right to perform a full audit of your accounts or check them any time it is necessary. However, it is rare for them to keep close tabs on every account.
Can I Sue a Chapter 7 Trustee? It would be unusual for a debtor to sue a Chapter 7 trustee after bankruptcy because of wrongdoing related to the bankruptcy case. Why? Because the debtor can object to a trustee's action against any property in the bankruptcy case itself before the trustee takes action.
You should disclose any payments to insiders on your Statement of Financial Affairs (Official Form 107). Bankruptcy trustees will also look through your bank statements to see your cash deposits and withdrawals. Any large deposits in your account should be accounted for.
When you file for Chapter 13 bankruptcy, you can continue using your existing bank accounts. Closing or changing your bank account is not required as part of the bankruptcy process. Your bank account will generally remain unaffected by the filing, allowing you to manage your daily finances as usual.
Keeping cash when filing for bankruptcy does change somewhat between Chapter 7 and Chapter 13 bankruptcies. Under Chapter 13, you also have the $550 cash exemption along with a wildcard exemption up to $1,475, allowing you to keep $2,025 in cash under Chapter 13.
Incomplete or Inaccurate Documentation: Filing for Chapter 13 bankruptcy requires comprehensive documentation, including income records, tax returns, and a complete list of debts and assets. Failure to provide accurate or complete information may result in disqualification or case dismissal.
Once the 341 meeting is completed, the trustee will review the debtor's testimony and financial disclosures to ensure compliance with the bankruptcy code. If any issues or discrepancies are identified, the trustee may request additional information or documentation from the debtor.
The IRS has substantial authority to collect on debts such as student loans or unpaid taxes. It could intercept your tax refund or take your paycheck or bank account. Consumers often can work out a repayment plan to resolve these debts. Like child support, they generally never go away, even in bankruptcy.