What to know about Nonexempt Property in Bankruptcy in Michigan

The idea of bankruptcy frequently evokes negative associations such as financial devastation and unmanageable debt. But, the truth is that for people and organizations facing severe financial difficulties, bankruptcy can be a helpful resolution. In actuality, bankruptcy was intended to offer relief and a new beginning to those struggling with debt. Knowing what is nonexempt property in bankruptcy may be advantageous since it may raise the amount of debt that is dismissed.

Bankruptcy attorneys in Michigan are focused on guiding people and corporations through the bankruptcy process and are known as bankruptcy attorneys. At Hammerschmidt Stickradt & Associates, we offer crucial legal representation, support, and counseling at every level of the bankruptcy process. Our trusted bankruptcy attorneys in Michigan can guide and help you with your nonexempt property in bankruptcy and other bankruptcy concerns. Schedule a free consultation with us today!

What is Nonexempt Property?

Anything you own that isn’t exempt from bankruptcy protection is known as nonexempt property. This isn’t to mean that if you declare bankruptcy, you’ll have to give everything up—you won’t. The goal of bankruptcy is not to make your life more difficult but to give you a fresh start. The property mentioned in your state’s exemption statutes, which are likely to contain items you’ll need to work and maintain a residence, will be exempted (protected).

What are the Common Exempt Properties in Bankruptcy?

Here are some common exempt properties in bankruptcy:

  • Homestead – Up to a certain amount, your principal residence may be excluded from being sold to settle debts.
  • Personal property – Up to a specific value, this can include things like clothes, furniture, appliances, and other household goods.
  • Retirement accounts – Retirement assets like 401(k)s, IRAs, and others are frequently excluded from being liquidated to settle debts.
  • Tools of the trade – Tools and equipment used for work may not be sold if you are self-employed or practice a certain profession.
  • Public benefits – The sale of several public benefits, including Social Security, disability, and unemployment compensation, may not be allowed.
  • Life insurance – The cash value of a life insurance policy may occasionally be exempt from being sold.

A bankruptcy lawyer in Michigan can give you advice on how to protect your assets, make sure that your rights are upheld throughout the bankruptcy process, and help you understand the specific rules and exemptions that apply to your circumstances. Hammerschmidt Stickradt & Associates have knowledgeable and trusted bankruptcy attorneys that can guide you through the complex trail of bankruptcy law. You may make wise financial decisions and get a fresh start after bankruptcy with the assistance of a trusted bankruptcy lawyer.

What happens to your Nonexempt Property?

The bankruptcy trustee appointed to your case will normally liquidate (sell) the nonexempt property if you file for bankruptcy and have nonexempt property in order to earn money to pay off your creditors. Your debts will be paid off using the sale profits in accordance with the bankruptcy laws’ established priority order.

There will be scenarios will happen for Chapter 7 and 13:

In Chapter 7:

The bankruptcy trustee, a court-appointed individual in charge of handling your case, will sell your nonexempt property when you file for bankruptcy, with the proceeds going to your creditors. The profits from the sales will be used by the trustee to pay your debts in the prescribed sequence under bankruptcy law. Priority debt will be paid off first, such as tax debt and domestic support obligations (child or spousal support). The trustee will settle your non-priority unsecured debts, such as outstanding credit card balances, personal loans, and utility bills, if you don’t have any priority debt or if money is still available after paying it in full.

In Chapter 13:

Your nonexempt property will not be sold by the trustee. Instead, you’ll make a payment to your unsecured creditors—those whose debt isn’t supported by collateral—in an amount equivalent to the value of the nonexempt property. You might be able to work out a repayment plan that permits you to maintain part of your nonexempt assets while still paying off your obligations with the assistance of an skilled bankruptcy lawyer. 

Hammerschmidt Stickradt & Associates have reliable and trusted bankruptcy attorneys in Michigan that can help you navigate your way to Nonexempt Property in Bankruptcy. To examine your alternatives and decide on your financial future, it’s crucial to speak with a bankruptcy attorney in Michigan as soon as possible if you have nonexempt property and are considering filing for bankruptcy.

Why Do I Need a Bankruptcy Attorney in Michigan?

People and corporations who file for bankruptcy should think about which assets will be shielded from creditors and which won’t. Nonexempt property is defined as assets that are not shielded by bankruptcy exemptions and can be sold to satisfy creditors. Although the prospect of losing these assets can be unsettling, holding nonexempt property may have significant advantages.

It can be intimidating to navigate the intricate world of nonexempt property in bankruptcy, especially for people who are already facing financial difficulties. Because of this, it’s essential that you work closely with a competent, skilled bankruptcy lawyer in Michigan. Hammerschmidt Stickradt & Associates have reliable and knowledgeable attorneys that can provide you the following to help you deal with your issues and concerns about Nonexempt Property in Bankruptcy: 

  • Negotiating with creditors
  • Filing for bankruptcy or any bankruptcy documentation
  • Representation in court
  • Debt counseling 
  • Identify asset protection
  • All other legal processes and services for bankruptcy

Our bankruptcy lawyer in Michigan can give you advice on the best course of action for your particular circumstances, assist you understand the laws and regulations governing nonexempt property, and make sure that your rights are upheld throughout the bankruptcy process. Talk to us today!

Call our Michigan Bankruptcy Attorneys Now!

In bankruptcy, nonexempt property can be a difficult and intricate subject that needs careful analysis and attention. It’s crucial to comprehend the particular laws and guidelines that relate to your circumstance if you have nonexempt property and thinking about filing for bankruptcy. You may manage the complexities of the bankruptcy process and make wise financial decisions with the assistance of a skilled bankruptcy lawyer in Michigan. 

At Hammerschmidt Stickradt & Associates, we help people in their time of financial need with passionate genuine care. Our bankruptcy lawyers serve clients in Royal Oak, Wyandotte, and throughout Michigan. Consult our Royal Oak bankruptcy attorney today for a free consultation!