It is important to speak with an attorney before you start a bankruptcy case. Working with a professional can help you benefit from the knowledge and experience of someone who is familiar with the bankruptcy code. An attorney can help you choose the right bankruptcy repayment plan for your case or Chapter 7 bankruptcy to protect your assets.
Chapter 7 bankruptcy allows non-exempt assets to be liquidated or seized to pay your debts. Working with an attorney can help you to establish bankruptcy exemptions and protect your property for the future. Bankruptcy exemptions can help you keep some of your most valuable property and some of your cash. These are the top bankruptcy exemptions you should discuss with your attorney.
These Are The Main Exemptions In A Bankruptcy.
You can keep certain assets in Chapter 13 bankruptcy by using bankruptcy exemptions. Florida bankruptcy exemptions include your main residence, without limits on its value, and your personal property. Some wages are also exempt. Your 401(k),s are also exempted up to a certain limit.
The main assets that you can protect are motor vehicles you use for work and commute, household goods and furnishing as well as retirement accounts, pensions, profit-sharing plans, and Social Security payments. You could work with an attorney to make a deal with your Chapter 7 trustee to purchase back some of the exempt property. This decision is usually based on an appraisal of your assets and the speed at which your assets can be liquidated to repay creditors or settle your outstanding debts.
Proper Planning Is Essential Before A Bankruptcy
You may be able to use asset conversion strategies in conjunction with your financial situation to help you protect more assets when you file bankruptcy. Asset conversion strategies can be used to protect assets and allow you to access more funds for other useful purposes. To avoid being denied your bankruptcy claim, this must be done strategically. An attorney can help you with asset conversion strategies like buying a car and other necessities before bankruptcy, contributing more to your retirement accounts, paying off your mortgage faster, getting new life insurance, or paying down non-dischargeable loans while you still have financial freedom.
Advanced Strategies For Planning
You can use some less-known techniques to protect your assets in bankruptcy. It is possible to protect more assets by visiting an attorney for a financial assessment.
Asset Protection Trusts: Independent trustees will manage the trust and control all distributions. You can also get spendthrift provisions, but the trust can protect more of your money.
Equity Reduction: It is possible to reduce the equity in an asset like your property by encumbering it. You must use encumbrance for a legitimate purpose. If it is taken out within one calendar year of filing for bankruptcy, the encumbrance may be canceled.
Finance through Accounts Receivable: If you own a business, it is possible to borrow against its A/R. This can be a good way to secure future business value and make liquidating your business unattractive for chapter 7 bankruptcy trustees.
Avoid Fraud And Bankruptcy Denial
While you may be able to work with an attorney to protect your assets, it is important to ensure that these assets are protected according to the bankruptcy code. Sometimes, transferring control of assets after filing for bankruptcy can lead to problems. Your bankruptcy trustee may revoke the transfer or deny you access to these assets. Fraudulent transfers are often closely examined and could lead to your bankruptcy claim being denied.
It is important to consult an attorney if you want to protect more assets during bankruptcy proceedings. Working with a skilled attorney is a great way to learn about your options and work to legally protect your assets. Before you discuss what assets you want to protect with a bankruptcy attorney, don’t try to hide or transfer them. It is always a good idea to speak with a lawyer before making major financial decisions or filing bankruptcy for the first time.
If you have questions about bankruptcy filings or how to protect your assets, please contact us immediately!
This post was written by Trey Wright, a lawyer with extensive experience in chapter 13 foreclosure in Tallahassee! Trey is one of the founding partners of Bruner Wright, P.A. Attorneys at Law, which specializes in areas related to bankruptcy law, estate planning, and business litigation.
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