There are numerous times when individuals who own few assets or even none at all fall into deep debt. In fact, nearly all Chapter 7 bankruptcy cases filed in the US fall into this category. Referred to as “no-asset bankruptcy”, these Chapter 7 cases refer to a debt who owns no property that isn’t covered by bankruptcy exemptions and therefore has a zero dollar value bankruptcy estate.
Chapter 7 Bankruptcy Estates
Your bankruptcy estate is the collection of all property that you own that isn’t exempt. This property is collected by the bankruptcy trustee and then sold to pay back some of what you owe to creditors. The amount of property exemptions that you get depends on which state you file in and if you decide to use federal exemptions instead of your states.
Chapter 7 No Asset Bankruptcy
If you’re able to cover everything you do own under the bankruptcy exemption, as is the norm, the bankruptcy trustee assigned to your case will file a no-asset report and your eligible debts are discharged with nothing being paid to those creditors.
Using Bankruptcy Exemptions
Bankruptcy exemptions exist in order to safeguard things you’ll need to make a fresh start after bankruptcy, such are your home, car, clothing, and money for living expenses. It’s important to stay current on your payments for any secured debts such as an auto loan or mortgage in order to keep the property. Your loan agreement gives your creditor the ability to take back property secured to a debt, and once your Chapter 7 bankruptcy is complete, you’ll have no recourse if you fall behind again.
Get Help in Chapter 7 Bankruptcy
Bankruptcy attorneys in Dallas and surrounding counties know how to use state and federal exemptions to best protect the most amount of your property from being sold to satisfy creditors in bankruptcy cases. In fact, it’s not uncommon for people filing bankruptcy to NOT LOSE ANYTHING when filing for Chapter 7 bankruptcy if you apply for bankruptcy exemptions correctly.