What Do I Need to Do If My Assets Exceed Allowed Exemptions?

The good news is that you have more than one option when you file for bankruptcy and discover that your equity and assets are “over-exempt”. An “over-exempt” status occurs when your assets – not including your IRA and your home – are worth more than the exempted amount. Some examples include cash, furniture, tax refunds and your car.

In Maryland, you’re allowed to keep approximately $12,000.00 of assets, not including your IRA and your home. If the equity in your assets is worth more than $12,000.00, you would need to pay an agreed-upon amount to the trustee in bankruptcy. The payment required might be so high that you are forced to file a Chapter 13 case and to buy back that equity from your creditors. In some cases, it is worth staying in Chapter 7 even if you’re many thousand dollars over your exemptions.

For more information, read Over Exemptions? Pay Cash to the Trustee and Sleep Better

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