Archive for the ‘California’ Category
Property is something which a person owns. It could be anything from a car to a collection of tools to a collection of designer clothes. No one wants to distinguish or classify their property. However, while filing a case of bankruptcy, the law gives a lot of importance to this classification. The legal terms and terminologies that are used in these classifications can leave anyone confused and inundated.
It is quite natural that everyone will not be having an idea of these property classifications. However, the basic classification in property by the law fall under two categories, namely exempt and nonexempt property.
As the names suggest exempt property is something, which the law allows one to retain after filing for bankruptcy and nonexempt property is that, which cannot be retained.
Different states have different laws, but generally exempt property includes the claimant’s residential property, his vehicle (cars, motorcycles, etc.), furnishings of the house, clothes, jewelry, life insurance policies, pension and other bank accounts, social security or disability benefits, trade tools, support received for spouse and child, etc. Depending on the law of the state, exemption can be limited or unlimited. For example, an unlimited exemption could mean that all the clothing is exempted and the individual can retain all his clothing. Whereas in case of limited exemption, only a portion of the property maybe exempted, for example, jewelry of up to $5000 maybe exempted.
Nonexempt property, on the other hand, is the property that is not allowed by the claimant to be retained, but rather it is taken over by the bankruptcy trustee who usually sells it to pay the creditors of the individual. If the individual has any cash, it is utilized to payoff the debts as well.
The property that generally falls under the category of nonexempt property are non-residential real estate, stocks, bonds, boats, planes, etc. However, this again is not the same for every state and changes as per the law of the particular state. In most cases, the bankruptcy trustee does not pay much heed to property, which is of less significance, like any old furniture or car, the resale value of which is very less.
In most bankruptcy cases, all the property is put under the category of exempt properties, whereby the individual can retain all his assets. The entire debt is discharged or released and the individual does not need to pay the creditors. In case the individual has debts in regards to some property or vehicle, which he wants to retain, then he has to reiterate the debt and pay the actual market value of the property or pay in regular installments as the dealing maybe.
In case one wants to retain any of the nonexempt properties, he should consult a good bankruptcy lawyer, who will be in the best position to suggest strategies to retain it. However, you should be very careful about this, as failing to disclose nonexempt property can result in a fraud or perjury case.
Bankruptcy laws keep changing from time to time, hence while filing for bankruptcy, you must be aware of the changes that have taken place and distinguish between the exempt and nonexempt properties. This can be further simplified by just hiring a good and knowledgeable bankruptcy lawyer, who will be able to suggest the various means of retaining your assets.
To get a reliable attorney in Los Angeles, call on:
McFarlin & Geurts, LLP
4 Park Plaza #1025
Irvine, CA 92614
(949) 544-2640
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