One of the biggest concerns my client has is what happens to their property in a Chapter 7 Bankruptcy. It is true that the Trustee in your case “takes over” all of the property of your estate, and that sounds very scary. What happens, in reality, is this: You must disclose EVERY asset you have your bankruptcy, from cash on hand, to your home and vehicles, to jewelry to household items, and any other interest you have in something of value. However, in most cases, your property is “exempt.” What this means is that the bankruptcy code allows a regular person with consumer debts to keep some or all of their property- the court isn’t going to leave you penniless, clotheless and carless. Now, the question will be is if your property is exempt or not- 11 US Code Section 522 provides for the federal exemptions you can take on your property (Michigan has its own set of different exemptions.) So for example 11 USC 522 allows a debtor to retain a certain amount of equity in a vehicle. This means that so long as your vehicle is under the allowable amount, you get to retain it. If you have more questions about what happens to your property in a Michigan bankruptcy, what happens if you are over the exemption limit, or any other bankruptcy question, call our Dearborn Michigan attorneys today for a consultation and see if a bankruptcy is an option for you.
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