Single mothers who are owed child support would have as a personal property asset the amount still unpaid. There is no exemption available for such amounts, but they are only likely to be seized by a trustee who knows that a payment from the father would come soon after the time of the bankruptcy filing. If local child support enforcement authorities have been unable to secure these payments, it is unlikely a bankruptcy trustee would.
May 8th, 2011 by Administrator
While there is a federal law exemption for a personal bodily injury claim, a recent court decision specifies that this would not apply to an employment law claim, such as a wrongful termination claim (MCAD in Massachusetts). The $21,625 exemption amount is available for personal bodily injury, not including pain and suffering or compensation for actual pecuniary loss. The court in In Re: Flattery, Francine Anne, et al. (Lawyers Weekly No. 04-035-11) (7 pages) (Hoffman, J.) (USBC) (Chapter 7 Case No. 10-43964-MSH) (March 23, 2011) found that this exemption was limited to payments on account of personal bodily injury, not applicable in employment law claims.
May 8th, 2011 by Administrator
Recent Massachusetts case law has established a standard for how much of the money refunded from a jointly filed tax return an individual bankruptcy debtor spouse has an interest in. According to the court in Hundley v. Marsh, Trustee (Lawyers Weekly No. 10-031-11) (16 pages) (Cowin, J.) (SJC) Certification of questions of law to the Supreme Judicial Court by the 1st U.S. Circuit Court of Appeals. (Docket No. SJC-10729) (March 7, 2011), this is determined by whether the spouse would have been entitled to a refund had both spouses filed separate tax returns, contributions to the joint refund and hypothetical individual tax liability. This could mean a non-working spouse may not be entitled to even a portion of a tax refund.
April 6th, 2011 by Administrator
A bankruptcy debtor keeping their residence may wish to lose other nonexempt real estate they have an interest in, such as a timeshare. Often, it is difficult to actually give up an interest in timeshare real estate if the trustee for the case themselves does not pursue the property. The company providing the timeshare may have their own policies for surrendering the property back to them, but they may still pursue such owners for unpaid maintenance fees. Such fees can, of course, be discharged in a Chapter 7 case.
April 6th, 2011 by Administrator
A Chapter 7 bankruptcy is a legal liquidation of non-exempt assets, so debtors in such cases want to be able to keep as much of their property as possible. State laws generally allow a generous exemption amount for a homestead in the debtor’s personal residence, while federal law generally allows liberal exemptions for other personal property items. However, these different exemptions must be used consistently throughout the petition. A debtor has to pick which to use, state or federal law. Mixing the exemptions allowed by two systems in order to achieve maximum protection for the debtor’s case is absolutely prohibited.
March 2nd, 2011 by Administrator
Persons contemplating bankruptcy can enter into a car loan without worrying about losing the new car in their bankruptcy. As long as the money they have put down is within the exemption allowed under the appropriate law, they would be allowed to keep the car and continue regular payments if such payments are affordable within their means given their income and other expenses. They should be allowed to reaffirm this debt and keep it outside of their bankruptcy, while discharging the debts they need to.
March 2nd, 2011 by Administrator
There is good news for people contemplating bankruptcy who own and wish to keep the home where they live. For thirty-five (35) years, Massachusetts state law has allowed an individual a $700 exemption for their motor vehicle. This exemption is used for homeowners, whose equity interest in their residence is protected by the state’s homestead exemption. Unfortunately, most vehicles are worth more than this, leaving such debtors with unexempt value in their cars. The “auto exemption bill” signed by Gov. Deval L. Patrick on Jan. 7 raises this amount to $7,500, even a greater amount than that allowed under federal law.
February 16th, 2011 by Administrator
Even though a Chapter 7 bankruptcy is a “no-asset” case, debtors are still allowed to keep limited “exempt” personal property. A major concern of debtors is that they would lose their car if they filed for Chapter 7 bankruptcy. This should not be the case for most debtors unless they are defaulting on their car loan and listing the account as an unsecured debt on their bankruptcy petition. Debtors who own their home and are using the Massachusetts homestead exemption qualify to have a $700 car, but even if a debtor owns several thousand dollars worth in a motor vehicle, it is unlikely to be seized as used cars would likely not fetch enough for it to be worth the trustee’s while. Federal law for non-homeowners allows a $3,450 car, with additional amounts also available using the wildcard exemption.
Life insurance policies are considered exempt if they are term policies, usually the type offered by employers, with only a death benefit available to beneficiaries and no cash-out value during the debtor’s lifetime. Whole policies are not exempt, but policies worth relatively small amounts may be covered by the wildcard exemption. Most retirement savings accounts would qualify for an unlimited amount of exemption under both state and federal law and the monies from these accounts would likely only be seized as preferential transfers if the debtor had taken large distributions out before filing bankruptcy while avoiding paying creditors.
November 28th, 2010 by Administrator
There are several types of exemptions in bankruptcy. This means that bankruptcy offers certain protections to avoid your personal property from being seized or attached in a lien. One such exemption is the wildcard exemption.
The wildcard exemption can be used against any nonexempt personal property, especially money in the bank, additional amounts for household goods and furnishings and a motor vehicle. This exemption allows even “no-asset” Chapter 7 filers to retain their savings without the fear of liquidation.The current federal wildcard exemption is $11,975.00. This means that property valued up to this amount can be protected. This amount is for a single person and a couple filing a petition would receive twice this amount as each of them qualifies for the wildcard exemption.
November 18th, 2010 by Administrator
Most retirement accounts, including pensions and 401 (k) plans, are exempt property in a Chapter 7 bankruptcy case. However, a recent decision confirms that debtors should avoid excessive contributions to such plans that may be viewed as preferential transfers in avoidance of payments to creditors. In the case In Re: Corridori, Matthew A., et al. (Lawyers Weekly No. 04-081-10) (5 pages) (Hoffman, J.) (USBC) (Chapter 7 Case No. 10-41645-MSH) (Sept. 1, 2010), debtor husband was contributing $1,373 a month to his 401 (k) retirement plan and debtor wife was contributing $67 to her retirement plan. While retirement contributions are ‘untouchable’ in Chapter 13 under 11 U.S.C. s.541(b)(7), “just because the Debtors may not be able too confirm a hypothetical Chapter 13 plan does not mean that they are entitled to relief under Chapter 7.” Such contributions would actually give debtors an excessive difference between income and expenses that would disqualify them from Chapter 7 and convert their case into a repayment of creditors under Chapter 13.
October 7th, 2010 by Administrator
