What Is An Asset Case?
If you have been considering a bankruptcy filing, you may have already searched online for information about bankruptcy. It is quite common for individuals who are struggling with debt to search for bankruptcy information online as well as alternatives to bankruptcy. However, while some of the information you find online regarding bankruptcy is accurate and trustworthy (such as our blogs), some of the information about bankruptcy your find online is misleading, confusing and, in some cases, absolutely incorrect. One example is the information online about asset cases in bankruptcy.
Creditors would prefer all consumers believe that every bankruptcy case is an asset case because that might scare some people away from filing a bankruptcy. The fact is that 99% of the Chapter 7 cases filed are ruled to be no-asset cases. Even in most Chapter 13 cases, a debtor’s assets may be completely exempt meaning there would be no equity for creditors to seize even if the debtor filed a Chapter 7 case. However, for various reasons (i.e. income is too high for a Chapter 7 case, the debtor is trying to save their home from foreclosure, etc.), the debtor chose to file a Chapter 13 case rather than a Chapter 7 case.
A Chapter 7 Asset Case
An asset case is simply a case in which the debtor has non-exempt assets. For example, if a debtor owns a boat and the value of that boat is not covered by any exemption allowed under law, the Chapter 7 Trustee may liquidate or sell the boat and use the proceeds to pay the debtor’s unsecured creditors. It is rare that we find such a clear-cut case of a non-exempt asset because most debtors have already sold whatever they can in an attempt to pay their creditor to avoid filing bankruptcy.
In most cases, there may be a small amount of equity above the exemption allowed on a specific asset. Depending on the amount of equity in the asset, the trustee will declare the bankruptcy case to be an asset case and proceed to liquidate the asset to pay the unsecured creditors. In some cases, the debtor may be able to purchase the equity from the trustee to retain the asset. Before filing a Chapter 7 bankruptcy case, you should consult with an experienced Radcliff and Elizabethtown bankruptcy attorney to discuss exemptions and options for protecting your assets.
Experienced Bankruptcy Attorneys Serving Kentucky Families Since 1982
The bankruptcy lawyers at Musselwhite, Meinhart & Staples, PSC have been helping individuals just like you since 1982. We understand the stress, frustration and anxiety caused by debt problems and we offer hope to those struggling with a financial crisis. Bankruptcy offers you a fresh start to recover from your financial crisis to begin rebuilding your finances for you and for your family.
Call our office as 270-351-6032 or to schedule a free bankruptcy consultation with one of our bankruptcy lawyers. If you prefer, you can send a secure message through our online contact form and one of our helpful staff members will contact you to answer your questions about bankruptcy. We have offices in Radcliff and Elizabethtown and Louisville for your convenience.