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Some debts cannot be cleared (child support, judgments, certain student loans, most notably. Basically all loans other than government ones are private and nothing special). A list of debts AND assets that can't be cleared or taken is below.
I'm not sure what the above intended, but it is incorrect to think there is any quality or quantity of debt required to file. Many people go BK on just credit card debt (probably the most common thing in fact), with no secured or priority debt. (In fact, generally a credit card co that gets a judgment and can secure it to a property of yours...probably won't have the BK clear it, as judgments aren't covered in BK).
But you should also note that BK doesn't just eliminate debts...or debts of your choice.
You go bankrupt, not the debt. It involves all of your assets and all of your debts. In basic form...all of your assets (again minus some few exempt things), are surrendered and liquidated with the money used to pay as much of the debts as possible (all debts are given a priority - first as secured like a car loan or unsecured which means against everything generally)...some are paid more, some less)...any resulting deficiency may be eliminated (wiped clean). You do not get to get rid of the debt AND keep what you may have gotten with it, (or invested/paid for elsewhere, instead of paying the amount owed).
Exemptions under Federal law, which may change a little in State applications by the Federal BK Courtyou file in:
Personal and Real Property:
(1) Household: Up to $425.00 per item not to exceed a total of $8,625.00 (includes animals, appliances, books, crops, furnishings, household goods, clothing, Musical Instruments)
(2) Jewelry: Up to $1,075.00
(3) Vehicles: Up to $2,575.00
(4) Work tools (implements, books and tools of trade): Up to $1,625.00
(5) Health aides (wheelchair, etc.): Unlimited
(6) Burial plot: Up to $16,500.00 (in lieu of real estate exemption)
(7) Real estate (house, co-op or mobile home): Up to $16,150.00
(8) Any property: Up to $8,075.00 of unused portion of real estate exemption
Wages, Pensions, Recoveries and Benefits:
(1) Wages: None
(2) Wrongful death funds: Amount needed for support
(3) Personal injury funds: Up to $16,500.00 (excluding that for pain and suffering or pecuniary loss)
(4) Lost earnings payments: Unlimited amount
(5) Retirement benefits: Amount needed for support
(6) Alimony / child support: Amount needed for support
(7) Unemployment compensation: Unlimited amount
(8) Veterans benefits: Unlimited amount
(9) Social security benefits: Unlimited amount
(10) Public assistance: Unlimited amount
(11) Crime victims compensation: Unlimited amount
Insurance:
(1) Disability: Unlimited amount
(2) Unemployment benefits: Unlimited amount
(3) Unmatured life insurance: Unlimited amount
(4) Life insurance policy loan value, dividends or interest: Up to $8,625
(5) Life insurance proceeds: Amount needed for support
If you're doing a Chapter 7 bankruptcy, you can't discharge:
- Taxes and tax liens
- Student loans
- Domestic support obligations (child support and alimony)
- Luxury goods over $500 purchased within 90 days of filing
- Fines or penalties of government agencies
- Cash advances of more than $750 taken within 70 days of filing
- Fraudulent debts
- Willful or malicious injury to another
- Death or personal injury from the operation of a motor vehicle, aircraft or vessel while intoxicated
- Condominium or cooperative association fees
- Debts not listed on your schedules
Debts arising from fraud or maliciousness are not automatically excepted from discharge. The creditor must make a request to the court to except these types of obligations; otherwise they will be discharged
What else can I help you with?
What happens if three people inherited property and one of three files bankruptcy?
The bankrupt's property interests can become part of the bankruptcy estate and ultimately disposed of by the court. On motion, indivisible interests might be excluded by the Bankruptcy Court and alternatively may be subject to satisfaction of value to creditors out of financial assets to protect the interests of the other owners. Sometimes some assets are simply absolutely excluded from the bankruptcy estate by statute in Title 11, or a rule promulgated thereunder, or in a common-law precedent.
Is property held in an irrevocable trust protected in bankruptcy?
Can you protect your assets from bankruptcy by placing them in an irrevocable trust?
If you file a bankruptcy will your holdings in another country be protected?
In a US bankruptcy, you will have to turn over all property of the estate. Out of country assets are property of this estate.
Is it possible to go bankruptcy only on one of your property if you own several?
No.. bankruptcy when you have many debts and no assets can be liquidated for you to pay your debts..
Can you sell personal property when filing bankruptcy?
When filing bankruptcy all assets are placed in a bankruptcy estate. Some assets are allowed to be protected and qualify for an exemption by the trustee. Items that are placed in exemption are permitted to be sold, but the trustee should be notified prior to the sale.
If you're in Chapter 13 but your 2nd home is excluded can you refinance it without alerting Bankruptcy Court?
No, the second home is is not excluded. Everything you own is part of your bankruptcy estate and is the property of the bankruptcy trustee, including the second home. You would need court permission to refinance either of your properties. To do so you have to bring a motion requesting said permission and showing how the refiance would benefit your creditors over the plan you already proposed. As part of the motion you would have to propose an amended plan that includes the refinance. Since the property is not, due to the bankruptcy, owned by you, you shouldn't be able to refinance it. The tirle company should pick up on the bankruptcy and not allow the refiance. An alternative to getting court permission is to simply dismiss the chapter 13 case and do whatever you want. You have a right to have the case dismissed. You just need to submit the request to the court and wait for the judge to sign off on the dismissal order. I get the impression that you didn't list your second home in the bankruptcy (is that what you mean by "excluded?"). If so, you committed bankruptcy fraud and your bankruptcy case could be dismissed and charges can be filed by the US Trustee, part of the Justice Department. At best the trustee would want you to add the additional property to your papers. Adding the additional property would change your bankruptcy case (assets) and the plan you filed with the court that was determined by your assets and debts.
Can one sell property after the trustee has indicated what assets must be liquidated?
If you are in the midst of a bankruptcy proceeding the title to all your property is in the trustee. You can't sell any property. You should direct any questions to your attorney or to the trustee in bankruptcy.
If your spouse is incarcerated are you entitled to all his assets?
You are entitled to their assets if you are married, because they are your assets as well. Certain things that require joint filing like bankruptcy cannot happen while they are in prison.
Are you safe from creditors if you buy the assets of someone in bankruptcy without knowing they are bankrupt?
No, you are not. When someone files bankruptcy the title to their property is held by the trustee in bankruptcy. The bankrupt cannot sell any property therefore, if they do, the title is not clear. You may lose the property to the creditors if someone tracks it down. You would then be out of the property and any money you paid for it.
What is Motion to compel turnover in bankruptcy mean?
A motion to compel turnover in bankruptcy is a legal request made by a trustee or creditor seeking a court order to require a debtor to surrender property that is part of the bankruptcy estate. This property may include assets that the debtor has failed to disclose or is improperly withholding. If the court grants the motion, the debtor must comply and turn over the specified assets for the benefit of creditors. This mechanism ensures that all assets are accounted for and distributed fairly during the bankruptcy process.
What is the top priority when distributing assets from someone declaring bankruptcy?
Secured creditors to the extent of their security on specific property (e.g., mortgage interest on real property)
What property can bankruptcy court take?
All assets that are worth something can be liquidated (sold or auctioned to pay outstanding debts).
