Bankruptcy Rule 4003(a) requires debtors to disclose assets debtor claims to be exempt. Pursuant to Bankruptcy Rule 4003(b) Chapter 7 trustees have 30 days after the meeting of creditors or whenever an amendment has been filed to the exemptions to object to an exemption, whichever is later. If exemptions are not objected to, title to the assets revert back to debtor. In other words, after this period of time, debtor’s assets, once owned by the estate, revert back to debtor.
Once the objection period is over with, debtor now can do with the asset what debtor chooses to do. Debtor could, for example, sell his/her home, vehicle, or any other asset that is exempt without running afoul of any bankruptcy issues.
If an asset is exempt it is figuratively taken off the table as an asset Chapter 7 trustee can use to pay toward debtor’s debts. Title to the asset vests with debtor to use as he/she pleases.
The vast majority of Chapter 7 Bankruptcy cases that get filed in the USA are what we call “no-asset” bankruptcy cases. This means that, after accounting for “exempt” assets, there are no assets that can be used to sell and pay toward debts. The worry that so many have toward losing assets should they file a Chapter 7 Bankruptcy turns out to be unfounded.
To maximize your exemption rights, always reach out to local and instate competent bankruptcy counsel. Never contact out of state people to solve an instate bankruptcy problem. Also, never speak to paralegals, they are not licensed lawyers and cannot give legal advice. If you are asked to meet with a paralegal at your initial consultation with a law office, cancel the appointment and immediately call a different law office, one that respect its’ clients.
When the time is right, or when you are ready, reach out to Minnesota’s HIGHEST GOOGLE REVIEWED bankruptcy law firm at www.kainscott.com. You will be so glad you did!