If you own a car or house, you are like most other U.S. citizens in the fact that you possess an asset. Additionally, your property may be like most others if it’s tied to a loan agreement. Because of the high cost of housing and vehicles as well as many other necessary or luxury properties, financing agreements are quite common, and there are a range of ways you can enter into these agreements. While loans are very useful for you to acquire what you need in your daily life, they can also pose problems if you are unable to repay your debts. Behm Law Group, Ltd., can help you recover from burdensome debts and protect your property from liquidation by filing for Chapter 7 bankruptcy in Worthington, MN.
Filing for Chapter 7 bankruptcy may seem drastic, but in the long term, it can actually be one of the most effective ways to recover from onerous debts that you could struggle with for much longer if you didn’t file for bankruptcy. Though there are compromises you have to face in the process of filing for bankruptcy, the overall advantages can greatly outweigh the disadvantages.
Chapter 7 bankruptcy is a legal process through which your non-exempt assets (properties) are liquidated (sold). The money from the liquidation/sale process is then distributed by the chapter 7 trustee administering your case to repay some dividend to your creditors (lenders), and in return, your debts are discharged (dissolved). However, because the U.S. Bankruptcy Court does not want to leave people who file for Chapter 7 bankruptcy destitute and unable to reorganize and contribute to the national economy, it allows filers to claim exemptions on their properties.
These exemptions protect certain values or equitable interests as to your properties, from your home to your car to some luxury items. Because of the allowances your claims to exemptions provide, most Chapter 7 individual consumer cases are considered “no-asset” cases because the bankruptcy exemptions are typically sufficient to protect any values or equitable interests that you have in those assets.
While there are technically assets involved in virtually every Chapter 7 bankruptcy case, your trustee and the court take the exemptions you claim into consideration when determining a no-asset case. Simply put, if your claimed exemptions don’t allow the liquidation of major asset values, your trustee will not pay your creditors anything.
This means your trustee won’t get paid any additional amounts from your case beyond his or her typical per case fee of $60.00. It’s similar to the situation of salespeople who are paid commission on top of base wages when they make a sale. If they don’t make a sale, they aren’t paid any extra commission wages.
Your trustee may also consider your case to be no-asset if the majority of your properties are exempt from the bankruptcy process. From the perspective of bankruptcy filers, a no-asset case usually bodes well because they will be able to protect their property from liquidation.
If you are considering filing for Chapter 7 bankruptcy in Worthington, MN, and want to learn more about exemptions, assets, and liquidation, contact Behm Law Group, Ltd., today at (507) 387-7200.