0
Does chapter 7 bankruptcy exempt whole life policies cash value?
Wiki User
∙ 14y ago
This is a great question, but the answer really depends on your state's law. Your state laws define the exemptions that a debtor may use in a bankruptcy.
Generally, the cash value of a whole life policy is considered exempt. What is determined by state law is whether your last year's contributions are exempt or not. Some states will require you to pay out of the cash value any amount you paid in during the last 12 months. Other states may have a wild-card exemption which would permit you to exempt those payments regardless of their nature. Bankruptcy is a complex area; you should contact a bankruptcy attorney in your area to discuss this further.
Wiki User
∙ 14y ago
Add your answer:
Earn +20 pts
When you go bankruptcy do you have to put up your house for collatoral?
In most cases you will not lose your home during your bankruptcy case as long as your equity in the property is fully exempt. Even if your property is not fully exempt, you will be able to keep it, if you pay its non-exempt value to creditors in chapter 13.
If you sell a listed asset how much goes toward bankruptcy?
If the bankruptcy is a Chapter 7, and the asset is not exempt, you cannot sell it. It is the property of the bankruptcy estate administered by the trustee. If the asset is exempt, you can sell it and keep the proceeds. If the asset sells for a lot more than you listed its value as, be prepared for a claim by the trustee. If in a Chapter 13 and the Plan has been approved by the court, you are a debtor in possession and can sell assets with no problem, unless, as above, the asset turns out to have a significantly higher value than you listed.
If fully paid can you keep your motorcycle if you file personal bankruptcy in Pennsylvania?
In federal bankruptcy, it depends on the value of the motorcycle and whether you can exempt it or pay the trustee the value of the bike. If there is a state bankruptcy procedure in PA, the rules may be a little different.
You have file personal chapter 7 bankruptcy in Dec 09 and due to receive a settlement check for a diminished value automobile claim from March of 2007. Does the Trustee get to keep the proceeds?
Unless you claimed the proceeds as exempt when you filed, the trustee gets the money.
Will you lose your car in Chapter 7 bankruptcy if car is paid for?
If you own your car then you'll be able to keep it if its value falls under your state's vehicle exemption amount. The state exemptions vary widely and some use the federal exemption. The federal bankruptcy exemptions allow you to exempt up to $3,675 of equity in your car.
Chapter Seven Bankruptcy - Liquidation and Exemptions?
Bankruptcy is a legal procedure which allows someone to either reduce or eliminate their worrisome debts. The U.S. Bankruptcy Code in Title 11 outlines and details requirements, statutes and courts that make a bankruptcy case operate smoothly.The main difference between Chapter 7 bankruptcy and Chapter 13 bankruptcy is the latter's agreement of reorganizing debt instead of eliminating it. In Chapter 7 bankruptcy, all debts must be cleared. Creditors allow a Chapter 7 bankruptcy to be a volunteered procedure, but it's usually forced. Chapter 13 bankruptcy is always voluntary. Every eight years, a Chapter 7 bankruptcy can be filed, contrasting Chapter 13's two-year wait.Chapter 7 bankruptcy obliges creditors to seek liquidation of non-exempt assets. A regent of the bankruptcy court takes possession of these assets and sells them; the money gained from the assets sold is used to help free the debtor from his or her debt. After this, the debtor is free of obligations to the creditor.Not all debts are discharged in Chapter 7 bankruptcy, however. Financial obligations such as alimony, child support, taxation and student loans cannot be discharged. Likewise, any debts that were deliberately not mentioned will refrain from being exempt of dismissal.For Chapter 7 bankruptcy, liquid assets are targeted instead of other things of material value. Liquid assets are what someone would survive on if they lost employment suddenly. The usual list of liquid assets include cash money, funds in a bank account (checking or savings), mutual funds, stocks and bonds. Illiquid assets take a great length of time to be converted into money, which is why creditors shy away from claiming these in a Chapter 7 bankruptcy. Electronics, furniture, jewelry, pricey clothes and real estate are all examples of illiquid assets.The consequences for filing bankruptcy is steep, starting with the length of time it lasts on a person's credit report: 10 years. That's an entire decade of a person's credit looking risky and intimidating to potential lenders. Investing will also be a lot tougher after a Chapter 7 bankruptcy, but it's not an impossible goal. As with all bankruptcies, credit score is severely reduced.Bankruptcy is not all doom and gloom, though. As stated previously, some assets (liquid or illiquid) are exempt from being taken into custody. The most commonly exempt assets are:Health insurance plans. An IRA account with less than one million dollars. Motored vehicles up to a certain value. Household appliances. Rewards from personal injury lawsuits. Necessary clothes, footwear and home furnishings. Inexpensive trade tools.Further inquiry on exemptions can be determined by what state the debtor lives in. Not all states have the exact same laws on Chapter 7 bankruptcy exemptions.
What happens to someone in a personal bankruptcy?
It depends on whether or not you qualify for Chapter 7 or Chapter 13. For Chapter 13, you will slowly have to pay your creditors back over time. For Chapter 7, you have to assign a value to everything that you own. The creditors will then determine whether or not these items will be included in the bankruptcy in a hearing.
What Are Chapter 13 Bankruptcy Exemptions?
Although most debtors keep all their property after filing a Chapter 13 bankruptcy, debtors must file exemptions when applying for this type of bankruptcy just like they do when they file for Chapter 7 bankruptcy. Filing exemptions in a Chapter 13 bankruptcy is for the benefit of creditors rather than the debtor himself. The exemptions inform the creditor of how much she is entitled to and allows her to compare the settlement of the case with the settlement the creditor would receive if the debtor filed Chapter 7 bankruptcy instead.Best Interest of Creditors TestU.S. bankruptcy law requires Chapter 13 bankruptcy applications to pass the "best interest of creditors test." Creditors involved in a Chapter 13 bankruptcy must receive at least as much from the bankruptcy as they would if the debtor filed Chapter 7 bankruptcy instead. The bankruptcy trustee performs this test by deducting the debtor's exemptions from the full value of the estate to determine how much the estate would be worth if the debtor filed Chapter 7 bankruptcy. Creditors may receive more from Chapter 13 than they would from Chapter 7, but they may not receive less from Chapter 13.Determining Payment AmountChapter 13 exemptions, or more specifically, the best interest of creditors test, are also used to determine how much the debtor must pay over the lifetime of the plan. To make this determination, the bankruptcy trustee compares three numbers. The best interest of creditors test, or the non-exempt value of the estate minus administrative costs, is one of these three numbers. The total amount of priority claims, such as alimony, child support and back taxes owed, is another number the bankruptcy trustee looks at, as is the debtor's disposable income, or income after payroll taxes each pay period. The bankruptcy trustee takes the biggest of these numbers and divides it by the life of the plan to determine how much the debtor must pay each month.ConsiderationsChapter 13 bankruptcy may be attractive to some debtors because debtors are at low risk of losing their property through this arrangement and there are no income limitations on this type of bankruptcy. However, debtors cant file for Chapter 13 bankruptcy if they have such large exemptions that the bankruptcy will fail the best interest of creditors test. In addition, Chapter 13 bankruptcy negatively affects the debtor's credit for seven years and requires debtors to pay the bankruptcy trustee on a monthly basis.
Would you be asked to put a mortgage on your house to pay your bills if you file for chapter 7 bankruptcy?
No. But if you have equity in your home it may not be the best approach. A chapter 13 is designed for a situation where the person has equity or is behind on payments. In a Chapter 7 - You will be asked to pay the Trustee the value of the equity of your home... so if you have $15,000 in non-exempt equity, you'll most likely have to write a check to the Trustee for $15,000 or surrender the home. no ,but if you include the Mortgage on your property in your bankruptcy,most likely you will have to surrender the property to a court appointed trustee
Does bankruptcy attorney keep rental property income?
The answer to this question depends on whether you are filing Chapter 7 or Chapter 13 bankruptcy. In Chapter 7 bankruptcy, if the rental property has equity, meaning that the value of the property exceeds what is owed on the property, the trustee would almost definitely seize property and sell it to satisfy some or all of your unsecured debts.
If your Chapter 7 was dismissed and discharge recalled for failure to surrender non-exempt value can you file again before 6 years?
Possibly. It would depend on several things. For one whether or not the state you reside in allows Federal and/or State BK filings. Some states opted out of Federal bankruptcy. Persons considering bankruptcy should refer to the laws of their residential state.
Can you sell your home and buy another if you are in a chapter 13 bankruptcy?
i wouldn't sell it but instead invest in it till it adds value
