A major concern when filing for bankruptcy is property/asset protection. A bankruptcy estate is created upon the filing of a bankruptcy. Debtors are required to list all of their assets in their petition, whether they would like to keep them or not. All assets become property of the bankruptcy estate, which means the debtor no longer can sell them without the court's permission. The law allows a certain amount of assets to be exempted from the estate, which means the Debtor can keep the asset. Assets that cannot be exempted will be sold by the bankruptcy trustee, and the proceeds goto creditors.
It is very important to accurately list all assets that you own in your petition so that you can exempt them from the bankruptcy estate. One easy way to lose an asset is by not listing it in the petition since property not listed cannot be exempted. By law, concealed assets, whether intentional or not, cannot be exempted.
The amount of property that can be exempted depends on the type of assets you own and whether you are filing jointly or individually. Because of Washington's community property law and Washington's two exemption schemes, the application of exemptions requires specific knowledge about your case. To get an idea about how much property can be exempted under Washington State law, please fill out the free bankruptcy evaluation form or schedule a free consultation with one of our bankruptcy attorneys.
Reaffirmation Agreements In Chapter 7
In order to keep property that the Debtor still owes money on, in most cases, the Debtor must continue to pay the debt even after bankruptcy. Some creditors will require the Debtor to reaffirm the Debt. Before a Debtor can enter into an agreement with the creditor to keep a particular debt outside of the bankruptcy discharge (also known as a "Reaffirmation Agreements"), the Court must find that the reaffirming the debt:
Under the undue hardship factor, the Court requires that the Debtor have the ability to pay on reafifrmed debt. This means that if paying on the jet ski will cause the Debtor to be short of cash ever month, the Court will likely deny it.
An attorney can help prepare or review reaffirmation agreements with creditors after the bankruptcy case is filed. If no reaffirmation agreements are filed, the debt is automatically discharged.