Most chapter 7 bankruptcies end up being no-asset cases which means that the debtor gets to keep all of their personal belongings. In a no asset case there are no assets for a bankruptcy trustee to administer and distribute to creditors. Your bankruptcy attorney can advise you if your case is likely to be a no asset case.
In Washington state, debtors may choose to use Federal or State exemption to protect their assets. Depending on what assets a debtor has will depend on which set of exemptions are used. The State and Federal exemptions may not be combined. Debtors who file for bankruptcy and have assets above the exemption limit often think that their assets cannot be protected, however this is not always true.
When a debtor files bankruptcy and has significant non-exempt assets, it is the perfect time to talk to a legal professional about pre bankruptcy filing planning. If your assets are not exempt then you should not worry to much. Often times, bankruptcy trustees will be willing to make a deal with debtors who agree to make payments to a trustee in exchange for the debtor being allowed to keep an asset. Some debtors are tempted to hide or transfer assets prior to filing for bankruptcy, but this would be a mistake as hiding assets may result in you not receiving a discharge.
What happens when the bankruptcy debtor has too much money in their bank account? The debtor may want to spend some of this money on living expenses or make a contribution to a 401K if you have a history of making such contributions. If you file a case with too much money above the exemption limits it may be subject to being taken by the bankruptcy trustee.
What you should do with assets depends on your personal situation. There are different types of debts, each treated in a different way, some of which may be worth paying prior to filing. Debts worth paying are called priority debts and include things such as taxes incurred in the last 3 years, debts owed to city or government agencies, child support or or debts from criminal activity.
If you have additional questions regarding valuable assets and bankruptcy, give Symmes Law Group a call today to discuss your options at 206-682-7975