An appointed trustee oversees your Chapter 7 bankruptcy case, and one of the trustee’s responsibilities is to take control of your assets, sell them, and then distribute the proceeds to your creditors. To be paid, a creditor must submit a claim that is accurate and complete.
In any case, your trustee is limited in what he or she can seize. Some of your “exempt property” can be kept, ensuring that you don’t lose everything you own and that you can start over fresh.
Both federal and state laws can have exemptions, which only apply to a specific type of property. Exemptions are available from the federal government as well as from each state. One can only use the state list in some states, while in other states they can use the federal list as well. They can choose which exemptions are most advantageous to them.
Exemptions such as these are common:
- Some retirement accounts, such as IRAs
- Property required for one’s employment or livelihood
If you accept your state’s list and your state does not provide an exemption for such accounts, you can still get a retirement plan exemption.
This is by no means a comprehensive list. Because the trustee has little or nothing left to sell or liquidate following the application of exemptions, many Chapter 7 cases are referred to as “no asset” cases.
Even if you pay your debts in full, your creditors may not receive all of your money. Even after the exempt property is taken into account, most Chapter 7 bankruptcy estates do not have enough money to pay all of the creditors who are owed money. The debtor is “discharged” of these unpaid balances, so he or she no longer owes the money.
Comparing Chapter 13 bankruptcy in Ontario with Chapter 7 Bankruptcy.
Choosing the right bankruptcy filing type is critical to your future financial well-being because there are a variety of options. Chapter 13 bankruptcy in Ontario and Chapter 7 bankruptcy each have their advantages and disadvantages.
The likelihood of your bankruptcy being discharged is nearly 100%.
Getting your bankruptcy discharge in as little as three months is possible if you’ve never filed for bankruptcy before, pass the means test, and are upfront and honest with the bankruptcy court and the bankruptcy trustee during the bankruptcy process. To be honest, it’s pretty much a given as long as you make sure you meet all the requirements both before and after filing for bankruptcy.
You’ll probably be able to keep your possessions.
More than 95% of Americans filing for Chapter 13 bankruptcy in Ontario do so with the intention of keeping all of their personal property.
As a result, your creditors can’t seize certain assets, which are referred to as “exempt property.” Any property you own that is exempt from forfeitures, such as a monthly social security check or even a kitchen table, is yours to keep.