Arming yourself with bankruptcy information can help reduce the stress of your situation. These articles written by the Lawyers at Khoshnood Law Firm can help explain in detail issues such as wage garnishment, taxes, foreclosure and other bankruptcy issues.
If you are thinking about filing a Chapter 13 bankruptcy, you may be wondering about what is going to happen to your property and assets. For most people, filing a Chapter 13 bankruptcy protects their property and assets from their creditors. For example, if you are behind on your car note, the creditor will want to repossess the vehicle. Filing a Chapter 13 bankruptcy stops repossession and protects your vehicle while you are in your Chapter bankruptcy case.
When you file a Chapter 13 bankruptcy case, a provision of the Bankruptcy Code known as the “automatic stay” immediately goes into effect. For most people, this is one of the major benefits of filing a Chapter 13 bankruptcy, because this code section helps them to protect their vehicle from repossession or their home from foreclosure. However, there are two instances where keeping property or assets in a Chapter 13 bankruptcy case may be problematic.
In the first instance, you own property that has a value that exceeds the exemptions used to protect it. When you file a Chapter 13 bankruptcy case, the laws of the State of Georgia provide you what are known as exemptions. Exemptions serve to do exactly that – they exempt the value of your property and assets from the bankruptcy estate that is created when a Chapter 13 bankruptcy case is filed. For most people, these exemptions are more than sufficient to protect their property and assets. Sometimes, the value of the asset exceeds the exemption provided under Georgia law. When that happens, the unprotected or non-exempt portion will impact the amount that must be repaid to creditors in a Chapter 13 bankruptcy case. This is what is known as a “liquidation analysis” – in a Chapter 13 bankruptcy case, your creditors must receive the same amount of repayment that they would have received had you filed a Chapter 7 liquidation bankruptcy. As an example, if you owned a 2010 Cadillac Escalade free and clear with no lien or title loans and it had an NADA value of $57,375.00, the exemptions you are entitled to receive under Georgia law would not be sufficient to protect the Escalade’s entire value. As a result, the amount that is unprotected or non-exempt would have to be paid to your creditors through your Chapter 13 bankruptcy plan. You would keep the Escalade – but the value of the Escalade, after the exemptions were applied, would be paid to your creditors.
In the other instance, you own and want to keep property that is not necessary for your effective re-organization. When you file a Chapter 13 bankruptcy, you are, in essence, re-organizing your debt and how it will be paid. Certain types of property are considering not necessary for your “effective” re-organization. For example, a time-share that is rarely used or recently purchase, in most instances, would not be considered necessary for your effective Chapter 13 bankruptcy re-organization. A motorcycle that is not your only source of transportation or rental properties that are not occupied are other examples of property that is not necessary for your effective re-organization. When you have property that is not considered necessary for your effective re-organization, it does not always mean that you must surrender that property. In most instances, it simply means that you have to increase the amount you are required to re-pay your creditors.
In order to fully understand what impact keeping property will or will not have on your Chapter 13 bankruptcy case, it is important to consult with an experienced Chapter 13 bankruptcy attorney.
When you file a Chapter 13 bankruptcy case, a provision of the Bankruptcy Code known as the “automatic stay” immediately goes into effect. For most people, this is one of the major benefits of filing a Chapter 13 bankruptcy, because this code section helps them to protect their vehicle from repossession or their home from foreclosure. However, there are two instances where keeping property or assets in a Chapter 13 bankruptcy case may be problematic.
In the first instance, you own property that has a value that exceeds the exemptions used to protect it. When you file a Chapter 13 bankruptcy case, the laws of the State of Georgia provide you what are known as exemptions. Exemptions serve to do exactly that – they exempt the value of your property and assets from the bankruptcy estate that is created when a Chapter 13 bankruptcy case is filed. For most people, these exemptions are more than sufficient to protect their property and assets. Sometimes, the value of the asset exceeds the exemption provided under Georgia law. When that happens, the unprotected or non-exempt portion will impact the amount that must be repaid to creditors in a Chapter 13 bankruptcy case. This is what is known as a “liquidation analysis” – in a Chapter 13 bankruptcy case, your creditors must receive the same amount of repayment that they would have received had you filed a Chapter 7 liquidation bankruptcy. As an example, if you owned a 2010 Cadillac Escalade free and clear with no lien or title loans and it had an NADA value of $57,375.00, the exemptions you are entitled to receive under Georgia law would not be sufficient to protect the Escalade’s entire value. As a result, the amount that is unprotected or non-exempt would have to be paid to your creditors through your Chapter 13 bankruptcy plan. You would keep the Escalade – but the value of the Escalade, after the exemptions were applied, would be paid to your creditors.In the other instance, you own and want to keep property that is not necessary for your effective re-organization. When you file a Chapter 13 bankruptcy, you are, in essence, re-organizing your debt and how it will be paid. Certain types of property are considering not necessary for your “effective” re-organization. For example, a time-share that is rarely used or recently purchase, in most instances, would not be considered necessary for your effective Chapter 13 bankruptcy re-organization. A motorcycle that is not your only source of transportation or rental properties that are not occupied are other examples of property that is not necessary for your effective re-organization. When you have property that is not considered necessary for your effective re-organization, it does not always mean that you must surrender that property. In most instances, it simply means that you have to increase the amount you are required to re-pay your creditors.
In order to fully understand what impact keeping property will or will not have on your Chapter 13 bankruptcy case, it is important to consult with an experienced Chapter 13 bankruptcy attorney.