An exemption is a piece of property that you can hold back during a bankruptcy. Exemptions range from cars to work tools and states have their own list of possible exemptions.
When filing bankruptcy, your bankruptcy lawyer ensures that your Schedule C lists all the bankruptcy exemptions that you want to claim. Exemptions not listed may be subject to liquidation, repossession, or other actions by creditors. So, making sure you thoroughly review exemptions with your lawyer is very important and is time well spent.
Creditor objections to exemptions
A bankruptcy attorney plays a vital role in helping you with exemptions. Creditors can object to claimed exemptions. Legal judgments may be necessary, and your lawyer may have to argue in your favor against the objection to your exemption. Stages of bankruptcy where you can anticipate creditor objections are during the 341 Creditors’ meeting and within the 60 days after the creditors’ meeting is held.
A trustee can also file an objection to an exemption but must do so within one year after closing the case. Trustees generally object because they discovered that an exemption claim was fraudulent. Anyone objecting to an exemption bears the burden of proving why the court should uphold the objection.
The Bankruptcy Code limits transferal of exempt property during bankruptcy and it is important to understand and abide by these rules. Once again, your attorney can help you with this.
If you have questions or concerns about exemptions, seek legal advice from an experienced bankruptcy lawyer. Harold Shepley & Associates is a full service debt relief law firm based in Pennsylvania that offers a free consultation to discuss your financial issues.