Chapter 7 bankruptcy is often known as “Liquidation Bankruptcy” but that doesn’t mean that if you file you will need to liquidate all of your property.
‘Liquidation’ can be an intimidating word when it’s related to your personal possessions but with a little explanation it becomes far less threatening.
What is exempt property?
If you want to keep your property in a chapter 7 bankruptcy case it is important to understand exemption claims. Exempt property is property that the court deems necessary for day-to-day life and thus is protected from liquidation and can be kept by the debtor (s). This property often includes household goods and personal effects. This property is exempt from being collected and sold in order to repay debts. The purpose of chapter 7 bankruptcy is to give debtors a fresh start and claiming exempt property helps ensure the debtor has something to begin that fresh start with. In order to maximize the property you are able to claim as exempt it is critical that you hire an attorney with high level of bankruptcy experience and knowledge of local exempt property regulations.
When filing a Chapter 7 Bankruptcy case in Louisiana, the debtor or debtors who file for Bankruptcy must turn-over certain non-exempt property to the Bankruptcy Trustee so it can be liquidated to repay some of the non-secured debt owed to creditors. Though you may lose some of your nonexempt assets, a great deal of property can be claimed as exempt and is protected from liquidation. Additionally, you could be able to maintain some of your nonexempt property by arranging payments to your Bankruptcy Trustee for that property.
The federal bankruptcy code allows each state to form its own property exemption laws so it is important to hire a local Bankruptcy Lawyer who has a great deal of knowledge and experience in Louisiana Bankruptcy Court in order to ensure you keep as much of your property as possible.
Exempt property is usually property that you utilize every day. Here is a list of property that can generally be claimed as exempt in a Baton Rouge or New Orleans Chapter 7 bankruptcy filing.
Dining Room Furniture
Living Room Furniture
- Coffee table
- End table(s)
- Entertainment center
- Dresser (s)
- Chest (s) of drawers
- Usually the only furniture that you would be required to liquidate would be furniture that rarely used or is of an excessive value. This could include event tables and chairs or furniture that is held in a storage unit and is thus not used for your day-to-day life.
- Dining Room Furniture
- Glass and Chinaware
- Utensils and Silverware
- Bedding and linens
- Pots and Pans
- Coffee pot
- Washer and Dryer
- Wedding Rings (up to a certain value)
- Vehicle(s) up to a certain value based on year, make, model, and miles
- Primary residence up to a certain value
If you have a question about a specific piece of personal property and whether or not it will be protected from liquidation as “exempt” contact a local bankruptcy attorney and ask about a free consultation.