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Exempt vs. Non-exempt Property Under Chapter 7

Did you know that the right to bankruptcy is a constitutional right? It is also complex body of law, with certain state-by-state variances, and can be safely and efficiently navigated only with the assistance of an experienced advocate.

A Chapter 7 bankruptcy can allow you to quickly liquidate many of your assets, use the proceeds to pay many debts, and then discharge many of the rest. Attorney Lawrence L. Szabo can help people throughout Oakland, Alameda County and Contra Costa County with Chapter 7 bankruptcy -- either visit our main Chapter 7 page or contact us for a free consultation. If you would like more information about Chapter 7, read the following.

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Chapter 7 bankruptcy can quickly resolve overwhelming debt and creditor harassment -- attorney Lawrence L. Szabo can show you how. Contact us for a free consultation. We serve Oakland, California and the surrounding areas of Alameda and Contra Costa Counties.

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Attorney Lawrence L. Szabo has more than 25 years of experience helping people in Oakland, Alameda County, and Contra Costa County with Chapter 7 bankruptcies. He offers free initial consultations -- contact us any time to set one up.

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Exempt vs. Non-exempt Property Under Chapter 7

In a Chapter 7 liquidation case, the debtor must relinquish certain property to the bankruptcy trustee so that he or she can sell the property and use the proceeds to pay off debts. Property of the bankruptcy estate is broadly defined in the Bankruptcy Code. 11 U.S.C. § 541. The bankruptcy estate is technically the legal owner of all of the debtor's property and consists of all legal and equitable interests that the debtor has in property at the initiation of the bankruptcy case. Income that the debtor earns after the date of the petition is not included in the bankruptcy estate. Debtors, whether they are businesses or individuals, are often justifiably concerned about what property they will be allowed to keep and what they must give up. A bankruptcy lawyer at Lawrence L. Szabo in Oakland, CA, can answer these and other questions, allay fears and keep the process moving forward as painlessly as possible.

Non-exempt property

Items that the debtor usually must forfeit include:

  • Expensive musical instruments, unless the debtor is a professional musician
  • Collections of stamps, coins and other valuable items
  • Family heirlooms
  • Cash, bank accounts, stocks, bonds and other investments
  • A second car or truck
  • A second home or vacation home

Exempt property

A debtor must file a schedule of exempt property with the court. Exempt property is property that the debtor can protect from liquidation. The Bankruptcy Code allows each state to adopt its own exemption laws, which the debtor can select instead of the federal exemptions. It is important to consult with an attorney who can explain the exemptions available under your state's laws and how they compare to the available federal exemptions.

Exempt property typically includes:

  • Motor vehicles, up to a certain value
  • Reasonably necessary clothing
  • Reasonably necessary household goods and furnishings
  • Household appliances
  • Jewelry, up to a certain value
  • Pensions
  • A portion of the equity in the debtor's home
  • Tools of the debtor's trade or profession, up to a certain value
  • A portion of unpaid but earned wages
  • Public benefits — including public assistance (welfare), social security and unemployment compensation — accumulated in a bank account
  • Damages awarded for personal injury

Speak to a bankruptcy lawyer

If you have questions about what property you will be allowed to retain if you file for bankruptcy under Chapter 7 of the Bankruptcy Code, it is prudent to seek the counsel of an experienced and knowledgeable bankruptcy attorney. Contact Lawrence L. Szabo in Oakland, CA, today to schedule a consultation.

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Lawrence L. Szabo
3608 Grand Ave. STE 1
Oakland, California 94610
Phone- 510-922-0565
Fax- 510-834-9220