Published on April 20th, 2021
Are you sinking in debt and seeking an option to get rid of it? If so, you may want to consider filing bankruptcy to get a fresh financial start.
However, you may be reluctant to take this route out of debt because you fear it could cause you to lose most of your most valuable assets. You may not know it, but most Chapter 7 bankruptcy filers keep all of their possessions after getting their debt discharge.
This LA bankruptcy attorney notes that most Chapter 7 bankruptcy filers have few assets. Therefore, if you manage to pass the bankruptcy means test, you may not have to turn over any non-exempt assets to the bankruptcy trustee in your case; simply because you don’t have any.
Instead, you will keep your possessions, and your bankruptcy proceeding will be considered a “no-asset case.” Read on to learn everything you need to know about no-asset bankruptcy cases.
Chapter 7 Bankruptcy Basics
Chapter 7 bankruptcy is the best-known and most popular bankruptcy chapter. Also known as “liquidation,” this type of bankruptcy can help you eliminate your debts quickly by selling your non-exempt assets.
This alternative will allow you to eliminate most of your unsecured debts, such as credit card debt, medical bills, and personal loans.
However, there are some debts that this type of bankruptcy cannot discharge, including alimony, child support, court judgments, and some taxes.
Moreover, Chapter 7 bankruptcy will leave a mark on your credit report for ten years. But don’t worry; you can start rebuilding your credit score right after your filing.
Now, not everyone qualifies for this type of bankruptcy. To be eligible for Chapter 7 bankruptcy, you will have to pass a means test, which will evaluate your income, assets, and expenses. However, you will most likely qualify if your income is below the state median.
The “No-Asset” Case
You won’t find the term “no-asset case” in the bankruptcy code. It is not a legal term; it is just a way to describe cases in which debtors don’t have to sell their property during their filing. However, it doesn’t mean that the filer is homeless or exceedingly poor.
In all bankruptcy cases, you will have the opportunity to exempt assets from your filing. An exempt asset will be protected during the process and won’t be sold to pay off your debts.
Now, if all of your assets fall under state exemptions, your filing will be deemed a no-asset case. Believe it or not, in the vast majority of bankruptcy filings, the debtor obtains a discharge of debts without selling a single thing.
Want to know if you can get rid of your debts without selling your possessions? Contact a Los Angeles Chapter 7 bankruptcy attorney, such as KT Bankruptcy Lawyer, for a free consultation.
Other Features Of The No-asset Chapter 7 Cases
Non-asset chapter 7 bankruptcy cases also have other relevant features:
- They’re faster: If your trustee doesn’t have to manage the sale of your assets, then your case will move much more quickly. You could get the discharge you need in a fraction of the time.
- Unlisted debts will be discharged: Normally, you will have to disclose a list of all your creditors when filing for bankruptcy. If you forget to include any of your creditors, then the debt won’t be discharged by the bankruptcy. However, things are different if you have a no-asset case. In most jurisdictions, your unlisted debts will also be discharged. This happens because the creditor wouldn’t receive anything even if they were listed.
How Can I Find An Attorney?
A lawyer near you is just a search away. Simply use Google or any other search engine of your choice, and type in “bankruptcy lawyer near me.” On the first page, you will find several legal professionals ready to help you.
Modern lawyers use Law firm SEO agencies to boost their online rankings and appear among the most popular search engines’ first results.