Exempt vs. Non-exempt Property Under Chapter 7

The thought of filing for bankruptcy can be frightening to many people. The stress of limited finances and creditor harassment can cause some to make poor choices, but these choices may only worsen an already serious situation. The way to avoid making further mistakes is to contact a bankruptcy law attorney who knows the right steps to take at every juncture of the process.

Central Florida Chapter 7 Bankruptcy Attorney · Orlando Bankruptcy Lawyer

If you are feeling overwhelmed by personal debt, you are not alone. This year, more than one million Americans will seek debt relief through Chapter 7 bankruptcy. The Law Office of Paul L. Urich is recognized as one of the prominent debt relief bankruptcy law firms serving residents of Orlando and communities throughout Central Florida.

We invite you to learn more about Chapter 7 bankruptcy on this page. Contact our offices in Orlando to arrange a free initial consultation to discuss your bankruptcy options today.

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At the Law Office of Paul L. Urich in Orlando, Florida, we think filing for Chapter 7 bankruptcy shouldn't put you on an emotional roller coaster. Our attorneys handle things smoothly and do everything possible to keep surprises out of the process.

The Law Office of Paul L. Urich is recognized as a prominent consumer bankruptcy law firm in Central Florida. Our lawyers filed more than 400 Chapter 7 and Chapter 13 bankruptcy petitions last year.

Exempt vs. Non-exempt Property Under Chapter 7

In a Chapter 7 liquidation case, the debtor must relinquish certain property to the bankruptcy trustee so that he or she can sell the property and use the proceeds to pay off debts. Property of the bankruptcy estate is broadly defined in the Bankruptcy Code. 11 U.S.C. § 541. The bankruptcy estate is technically the legal owner of all of the debtor's property and consists of all legal and equitable interests that the debtor has in property at the initiation of the bankruptcy case. Income that the debtor earns after the date of the petition is not included in the bankruptcy estate. Debtors, whether they are businesses or individuals, are often justifiably concerned about what property they will be allowed to keep and what they must give up. A bankruptcy lawyer at Law Office of Paul L. Urich, P.A. in Orlando, Florida, can answer these and other questions, allay fears and keep the process moving forward as painlessly as possible.

Non-exempt property

Items that the debtor usually must forfeit include:

  • Expensive musical instruments, unless the debtor is a professional musician
  • Collections of stamps, coins and other valuable items
  • Family heirlooms
  • Cash, bank accounts, stocks, bonds and other investments
  • A second car or truck
  • A second home or vacation home

Exempt property

A debtor must file a schedule of exempt property with the court. Exempt property is property that the debtor can protect from liquidation. The Bankruptcy Code allows each state to adopt its own exemption laws, which the debtor can select instead of the federal exemptions. It is important to consult with an attorney who can explain the exemptions available under your state's laws and how they compare to the available federal exemptions.

Exempt property typically includes:

  • Motor vehicles, up to a certain value
  • Reasonably necessary clothing
  • Reasonably necessary household goods and furnishings
  • Household appliances
  • Jewelry, up to a certain value
  • Pensions
  • A portion of the equity in the debtor's home
  • Tools of the debtor's trade or profession, up to a certain value
  • A portion of unpaid but earned wages
  • Public benefits — including public assistance (welfare), social security and unemployment compensation — accumulated in a bank account
  • Damages awarded for personal injury

Speak to a bankruptcy lawyer

If you have questions about what property you will be allowed to retain if you file for bankruptcy under Chapter 7 of the Bankruptcy Code, it is prudent to seek the counsel of an experienced and knowledgeable bankruptcy attorney. Contact Law Office of Paul L. Urich, P.A. in Orlando, Florida, today to schedule a consultation.

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DISCLAIMER: This site and any information contained herein are intended for informational purposes only and should not be construed as legal advice. Seek competent legal counsel for advice on any legal matter.

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