Chapter 7 bankruptcy actions give debtors who complete such a case a chance to get a fresh start financially by obtaining discharge of overwhelming debts which prevents such debtors from staying current with their monthly bills. These cases entail a process where the bankruptcy trustee appointed by the court uses funds gained from liquidating the debtor’s property to pay off the claims of creditors, primarily the secured creditors. The trustee may sell not only the home – or real property – owned by the filing debtor but also the personal property of the debtor.
Essentially the debtor’s personal property includes anything the debtor owns other than land or fixtures made part of that land. This may include a broad array of items and financial interests of the debtor ranging from furniture, cars and clothing to retirement accounts, stock shares and other financial instruments. When the debtor files a Chapter 7 case, the court rules require the debtor to file a list of all the property he or she owns. The trustee, in preparation for what is known as a creditor’s or 341 meeting, reviews the types of property in the bankruptcy estate and determines if the items of personal property can be sold for value. When it comes to stocks, bank accounts and financial instruments, the trustee can readily assess their likely liquidation value. As for other forms of personal property, the trustee may need to have an appraisal conducted to determine if the sale of such items can generate funds to pay off creditor’s claims.
Many forms of personal property may be exempt from liquidation. In the state of New Mexico, these items may be exempted:
- Books & furniture
- Building materials
- Jewelry up to $2,500
- Materials, tools & machinery to dig, drill, complete, operate, or repair oil line, gas well, or pipeline
- Tools of trade up to $1,500
- Health Aids
- Car up to $4000
- Cooperative Association Shares (neighborhood associations)
- Life Insurance policies and Cash Value
- Retirement Accounts
If a debtor’s car is less than $4000 in value, the debtor will get to keep the car. If it has a value exceeding $4000, the trustee may sell the automobile but $4000 of the proceeds from the liquidation will either be paid back to the debtor or used as an offset against other obligations the debtor is required to meet.
In Albuquerque, Giddens & Gatton Law, P.C. has bankruptcy attorneys who offer expert handling of Chapter 7, Chapter 11, Chapter 12 and Chapter 13 bankruptcy cases and can specifically provide advice as to disposition of property in Chapter 7, Chapter 11 and Chapter 13 cases.. The New Mexico firm represents many debtors and creditors in Albuquerque, Santa Fe, Taos, Raton, Farmington, Gallup, Grants, Roswell, Los Lunas, Placitas, Belen and the rest of New Mexico. Contact Giddens & Gatton Law, P.C. at (505) 633-6298 to set up an appointment or visit the firm’s website at giddenslaw.com. Giddens & Gatton Law, P.C. is located at 10400 Academy Road N.E., Suite 350 in Albuquerque, New Mexico.