Your Assets After Bankruptcy
Upon filing for bankruptcy and establishing a “bankruptcy estate,” individuals often have questions regarding which assets are exempt from being liquidated. More importantly, however, they wonder about future assets and those obtained after their bankruptcy filing. LegalZoom explains that generally, if a person acquires property after they file for petition, specifically Chapter 7, the property will not be subject to liquidation as part of the bankruptcy estate.
To better understand, when filing a petition for bankruptcy, a person must identify all relevant assets (those that can sold by the court) to a court-appointed trustee, so that these can be dismantled and proceeds can be given to creditors. On the other hand, some assets must be kept according to state and federal laws, such as those that are exempt.
Also at the time of petition, an individual is entitled to an automatic stay. As such, creditors cannot call a person about their debt, send threatening letters, make notations on his or her credit or file a lawsuit to collect outstanding debts. Even so, it’s important to understand that automatic stay is in place to protect “existing” debts accrued prior to filing bankruptcy. Therefore, it does not provide protection against anything purchased using one’s credit after a bankruptcy filing.
As a general rule, individuals can keep property acquired after a Chapter 7 bankruptcy filing, with a few exceptions. For instance, if a person is eligible to receive compensation or a type of property prior to filing, but do not actually receive it until after their bankruptcy petition begins, this could be deemed part of the bankruptcy estate. Though not true for every case, the newly received property might be up for liquidation as part of the bankruptcy estate.
While filing for bankruptcy can be a relief for some, it is a stressful time for many, as the process is riddled with complexities regarding assets and questions regarding future property. At Gingold & Gingold, LLC, we’ve dedicated our firm to providing the personal attention that individuals need when they are seeking a fresh financial start. What’s more, our experience allows us to protect clients’ interests during Chapter 7.
To schedule a free appointment with one of the trusted debt relief attorneys at Gingold & Gingold, call today.
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