Protecting Assets During Bankruptcy
If you are going through bankruptcy, you may be worried about protecting your assets. With the help of a skilled attorney, this is possible.
Protecting Assets During Bankruptcy: State and Federal Exemptions
People often have a false impression that if you file a chapter 7 bankruptcy, you’re going to lose all your assets, and that simply is not true. In New York State, we have two sets of rules that we can go by to protect your assets. We have the federal court exemptions and we have the state exemptions and they vary. In New York State, for instance, I’m able to protect seventy-five thousand dollars for an individual. For a couple, I can protect a hundred and fifty-thousand dollars’ worth of equity that they may have in their homestead and in their own personal residence. Under the federal code, I can protect twenty-thousand, two hundred dollars, or a little over forty-thousand dollars for a couple to file for a chapter 7 bankruptcy to protect their homestead.
Protecting Assets During Bankruptcy: Choosing State vs Federal
Now you may have asked, why would I choose to file a federal code as oppose to the state code, and there are some real important reasons why we look at your assets and try to fit you under the best code so that we can protect the most of your assets as possible. If you have a bank account with ten-thousand dollars sitting in it and you want to protect it under the state and your house and you’ve used the exemption, we don’t get any cash exemption. That means all the money that’s in your bank account is going to be turned over to the bankruptcy court to the benefit of your creditors. Or for that matter, if you’re going to receive a refund regarding tax, your income taxes, that refund could be confiscated on a pro-rated basis, the payer creditors. Under the federal code, I don’t have to use your full house exemption and I’m able to take the difference and use that toward taking care of those types of assets and at the same time, protect your house, protect the money that’s in the bank and your cash refund if necessary.
If you are looking for legal representation that can help with protecting assets during bankruptcy, please call our Buffalo office to set up a free consultation.