Exempt Property
What is Exempt Property?
Exempt property is property that is protected by law from the claims of creditors. However, if exempt property has been pledged to secure a debt or is otherwise encumbered by a valid lien or mortgage, the lien or mortgage holder may claim the exempt property by foreclosing upon or otherwise enforcing the creditor’s lien or mortgage. In bankruptcy cases, property may be exempt under either state or federal law. However, NY has opted out of the federal law exemptions. Exempt property typically includes all or a portion of a person’s home equity, motor vehicle equity, household furniture and personal effects.
What Will Happen to My Non-Exempt Property If I File Bankruptcy?
Non exempt property is part of your bankruptcy estate and is subject to sale by the bankruptcy trustee (the debtor is entitled to receive any exempt portion of the sale proceeds). However, even if your property is not fully exempt, you may be able to keep it if you pay its non-exempt value to your creditors in a chapter 13 bankruptcy. Also, you could agree to pay the trustee an amount that would allow you to, in essence, buy back the non-exempt property. The money that you pay to the trustee will be distributed to your creditors. You may also be able to “trade” exempt property for non-exempt property. Essentially, you allow the trustee to take and sale exempt property to avoid losing non-exempt property. There are additional options available. A knowledgeable bankruptcy attorney will be able to assist you with “exemption planning .”
Call (516) 858-2620 to arrange a FREE consultation with a bankruptcy attorney!
Please visit our Bankruptcy category to learn more about filing bankruptcy.
Will I lose my home or car if I file for chapter 7 bankruptcy?
Usually not.
In most cases you will not lose your home or car during your bankruptcy case as long as you can exempt the equity, if any exists, in your home or car. In New York, a person is currently allowed a fifty thousand dollar ($50,000.00) homestead exemption and a twenty-four hundred dollar ($2,400.00) motor vehicle exemption. If the property is exempt it may not be taken by the trustee.
However, bankruptcy does not automatically make a valid lien, mortgage or other security interest go away. Therefore, if you don’t make your payments on that debt, the creditor may be able to take and sell your home or car, during or after the bankruptcy case. Technically, a creditor can repossess your car even if your payments are current. The law requires you to redeem, surrender or reaffirm the vehicle (your bankruptcy attorney should advise you about this issue).
As always, The Long Island Bankruptcy Law Firm of VAUGHN & WEBER, PLLC is here to assist you. We are conveniently located in the heart of Nassau County, Long Island, at 217 Willis Avenue in Mineola, NY 11501. Contact us at (516) 858-2620 to arrange a consultation with a bankruptcy Attorney.
Please visit our Bankruptcy category to learn more about filing bankruptcy.
Remember: The law often changes, and each case is different. The above is meant to give you general information, and not to give you specific legal advice.
Tenant Files Bankruptcy
What happens if my tenant files bankruptcy?
Back Rent
If the tenant owed back rent and filed for chapter 7 bankruptcy, that debt is now likely discharged. This means that you will never be able to collect the rent that was owed to you at the time the tenant filed for bankruptcy. The tenant can voluntarily pay you, but you can not attempt to collect that past due rent while the automatic stay is in effect or after the debt is discharged. Such attempts would be either a stay or discharge violation.
Eviction
If you were in the process of evicting your tenant when they filed for bankruptcy, that eviction action is now likely stayed. This means that you will have to make a “lift stay” motion and have it granted by a Bankruptcy Court Judge in order to continue with the eviction in Landlord-Tenant court. However, under certain specific circumstances you will be allowed to continue with the eviction despite your tenant having filed for bankruptcy.
Long Island Landlord Tenant Attorney
As always, the Law Firm of Vaughn, Weber & Prakope, PLLC is here to assist you. Call (516) 858-2620 to arrange a FREE consultation with a Landlord Tenant attorney!
Please visit our Bankruptcy category to learn more about filing chapter 7 or 13 bankruptcy.
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