Chapter 7, Chapter 13 bankruptcy: What Phoenix filers can keep
On behalf of Ellett Law Offices , P.C. posted in 1. Personal Bankruptcy on Tuesday, September 4, 2012
Bankruptcy is a difficult time for anyone, and may involve a lot of hard decisions involving what assets to sell off to satisfy creditors. Even when an individual is cooperative in doing what they must to turn their finances around, it’s natural to want to preserve things like wedding rings or life insurance policies. For Phoenix residents, whether in Chapter 7 or Chapter 13 bankruptcy, this is actually a distinct possibility.
For example, a person filing for bankruptcy would be able to keep wedding or engagement rings granted they are worth less than $1,000. They are also able to keep one car, one bike, and a typewriter if they are worth less than $5,000. Despite being items people have come to value, things like cars can be critical in allowing an individual to find work after bankruptcy, if they are unemployed.
In terms of life insurance policies or annuities, it’s nationally considered that these items can be retained if the beneficiary is a minor child. In Arizona, the 9th U.S. Circuit Court of Appeals has ruled that these policies can be kept in bankruptcy if the beneficiary is any child, even if they’re no longer legally dependent to the filer. Regardless of the value of these accounts, they can continue to benefit the children named under them.
Filers are also able to keep things like a stove, refrigerator, and a table and chairs which all benefit cooking for and feeding a family. They can also keep a washer and dryer, a television, a radio alarm, and other items that can help an individual maintain a productive daily life. For Phoenix residents, a Chapter 7 or Chapter 13 bankruptcy doesn’t have to be the end, and these exemptions can assist in seeking a new beginning. Further, under a Chapter 13 proceeding, the goal is to keep significant assets by proposing a plan for the court’s approval to repay creditors over a stipulated time period.
Source: Arizona Daily Star, “Annuities, life policies get shield in bankruptcies,” Howard Fischer, Capitol Media Services, Aug. 25, 2012
Tags: Chapter 13, Chapter7, personal bankruptcy