EXEMPTIONS IN BANKRUPTCY AND EXPECTATIONS
Bankruptcy offers a new start to an individual, but it also has expectations. Disclosure is the first step. Disclosure and honesty are the foundation of any bankruptcy. If a debtor cannot or is unwilling to provide the court the necessary documents or testimony then they are not a suitable candidate for bankruptcy. Once all disclosures have been made, including listing the debtor’s assets, the individual can decide on the best exemption scheme. Minnesota is an opt-in State, which means that a Minnesota debtor can choose between federal and state exemptions. The equity in a debtor’s house is usually the deciding factor when it comes to choosing between federal and state exemptions.
Traditionally, the Minnesota exemptions did not include a “wildcard” exemption. A “wildcard exemption” allows the debtors to exempt assets not explicitly exempted in statute. Recent changes to the Minnesota exemptions have included a small wildcard exception. In my next blog I will elaborate on the changes made to the Minnesota exemptions. While bankruptcy provides relief to thousands of people each month, it does not always result in a case where there are no assets. After the debtor has made the necessary disclosures and used their exemptions correctly, there may be assets or transfers that are part of the bankruptcy estate. In a Chapter 7 liquidation bankruptcy, it is expected that the debtor will either sell the asset or pay to the estate the value of the asset. How does the debtor get the money to pay for the asset? The answer is always the exact same. If the debtor does not have the funds to pay for the non-exempt assets of the estate, he will be required to give the asset to the trustee.
Some people believe that they can ignore the estate’s request to turn over non-exempt property after filing. This can have serious consequences for the debtor. It could even result in the revocation or discharge.
CALL NOW FOR A FREE STRATEGY SESSION FROM AN MN BANKRUPTCY LAWYER AT LIFEBACK LAW FIRM
Bankruptcy offers relief, but bankruptcy filers do have expectations and responsibilities to the bankruptcy estate. Contact the attorneys at LifeBackLaw and see us at www.LifeBackLaw.com
and let us help you get your life back.
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