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Boca Raton Bankruptcy Lawyers

What Is A No Asset Bankruptcy?


If you go to see your bankruptcy attorney, he or she may tell you that you have a “no asset bankruptcy.” Yet, that doesn’t seem possible—you do own things. You’re not homeless or destitute. How can you have a bankruptcy with no assets, when you clearly own property?

All is Exempt in No Asset Bankruptcies

A no asset bankruptcy means that although you may own things, you don’t have enough assets, or the type of assets, that the bankruptcy court can legally take.

In bankruptcy, you are permitted a number of exemptions. Exemptions are property or assets that you have, that are legally protected, and which you are allowed to keep.

Some exemptions have dollar maximums to them—for example, you get to keep up to $1,000 of equity in a car, or up to $4,000 in personal property, if you don’t own a home.

Other exemptions don’t have a dollar value, but rather, are simply categories—for example, you get to keep any amount of equity that you have in a home, or up to two months of salary that you may have in a bank account, if you are a legal head of household.

When you look at everything you have, and it all fits into an exemption of some kind, there is nothing for the bankruptcy trustee or court to take, and you have a no asset bankruptcy.

Most Chapter 7 bankruptcies will be no-asset bankruptcies. If you do have property or money that exceeds your exemptions, your bankruptcy attorney will discuss this with you, and discuss your options, including possibly filing for Chapter 13 bankruptcy, if your property far exceeds the exemptions.

A no-asset bankruptcy means that your case goes much quicker, and you will get your bankruptcy discharge judgment  much quicker than you ordinarily would if you had assets that could be taken or exposed.

What if Something is Not Exempt?

If you do have assets that slightly exceed the exemptions, and thus could be taken by the trustee, you are best exposing physical property, as opposed to money (such as money in the bank, or money that is owed to you by someone else).

This is because with property, the bankruptcy trustee must go through the time, money and effort of evaluating the property, and actually selling it. In some cases such as with an older vehicle, you may even be able to argue with the trustee over the value of the vehicle based on wear and tear or mechanical problems.

Many times, the trustee will not feel it is worth the time, money and energy to do that, if the asset being exposed is of a moderate value.

Money, however, is easy for a trustee to take, as it doesn’t need to be converted into money. It is there for the taking.

We can help you understand how the bankruptcy process works. Contact the Boca Raton bankruptcy attorneys at the Law Offices of Stephen Orchard at 561-455-7961.




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