Assets You Can Lose
Video Transcribed: Oklahoma Attorney Edward Kelley here at 888-Debtline answering your bankruptcy questions. I’ve got a couple more for you in this series, actually, we’re on number three of five. Today we are going to talk about… The series is things you absolutely need to think about and know before you file a chapter seven or before you decide to. Today we’re going to talk about What Type Of Assets Can You Lose In A Chapter 7?
The big one that I always make sure my clients fully understand, your tax refund. Here’s how it works, your tax refund is considered an asset that you now own but just haven’t received as of the date of filing. This is particularly important once you get past July of a given year, although any portion you’ve accrued in the given year or past years that you haven’t filed or received are up for grabs.
Let’s say you are filing in November of this year, 2019, the trustee in your bankruptcy is entitled to all of your refund that was accrued up to the point of that day in November that you’re filing, so you haven’t received it, doesn’t matter. You don’t file until April 15th even if you file an extension, you don’t file until October 15th. Whenever you get that refund, you already had it. You already were entitled to that amount back in November so the trustee can take it at any time. Some trustees are more aggressive than others, but in all cases you’re supposed to give your tax return to your attorney to give to the trustee, and then they will determine what they can keep or not.
The only portion that’s safe is the earned income credit, not necessarily true for the child tax credit, not true for head of household benefits, but the earned income credit you get to keep, and any portion past the date of filing. If you file in February, they’re not entitled to the rest of the year, they’re only entitled to what you accrued from January 1st to February. That’s important to know before you file. You might think about that if you’re going to file in December, or prior to February when you file and get your tax refund. If it’s over, three to $500 most trustees are going to take it. Make sure you understand that.
Look at my list here. Assets, so here’s what’s exempt, we’ve talked about this in a previous series but just to understand anything beyond this is going to be up for grabs, your home, be aware that in within city limits, that’s only up to one acre in Oklahoma, the exemption, but there’s no really important limit on that value as long as it’s within an acre. You get over an acre, they can take all the rest of your property. You get to draw a line around the acre you want, of course containing the house, that’s what you’re going to want, but they’re going to take the rest of it if they want to, if it has value. Pardon me.
Also, your vehicle is exempt up to $7,500 in value. Even if you have a big loan on it, if you sold your car, paid off the note, and you’d have more than $7,500, the trustees entitled to take it, any additional vehicles, and that’s only one, you can’t spread that out across vehicles. That’s for one vehicle. Bear that in mind.Boats, extra cabins, oil royalties, interest in a trust, if you’ve got a settlement coming other than a personal injury settlement of up to $50,000, yes, and I’ve had this happen in cases, if you get that asset, if that was out there before the case was filed, then you know that’s a potential asset. Your basic household belongings generally going to be exempt, and your home, if you’re not in city limits, and this varies from state to state, but up to a sizable acreage, very sizable acreage in Oklahoma, you’re going to be okay, but be sure you check with your attorney for the current laws as far as the exemption on your homes, that’s probably going to be your most important asset.
Hopefully that helps. But again, before you file a seven or decide to do it, be sure you absolutely understand which assets are going to be exempt, meaning the trustee can’t take them, and which will not, meaning you can potentially lose them. We’ll see you again soon at 1-888-Debtline, of course you can always call me at 1-888-Debtline, if you have any questions or need help with a bankruptcy, or email me at Edward@Wirthlawoffice.