Exemptions

What is a Bankruptcy Estate?

Published on: January 13, 2025 | Rachel Coxwell

A bankruptcy estate is the entirety of assets or property rights that can be administered by the court in a bankruptcy case. The estate is created once a bankruptcy case is filed, and it includes all interests of the debtor in any kind of property.

Essentially this means that when a bankruptcy is filed, a debtor must list all the property they own or have an interest in. They must list assets such as real estate, vehicles, household goods, financial accounts, inheritances, businesses, potential active lawsuits they have against someone else, royalties, income, settlements, insurance funds, retirement accounts, tax refunds, and much more.

A debtor must list all their assets or potential assets in a bankruptcy case to ensure the court is fully aware of all property they own or have an interest in. However, just because the debtor must list all these types of property, does not mean they lose their property.

Bankruptcy has what are called exemptions that are governed by state laws. Exemption is what we refer to as the protections for certain property that a debtor can keep and retain through a Chapter 7. Once a debtor lists all their assets in their paperwork, they get to abide by the laws of the state where they filed and protect certain property from the bankruptcy court and trustee. The exemptions allowed in each state may determine what type of bankruptcy a debtor may file if they want to keep.

You may have heard some Chapter 7 cases referred to as a “no-asset case.” A no-asset case does not mean that a debtor owned or had an interest in nothing. It means that the debtor listed all their assets and interests in their paperwork, but state law helped exempt / protect those assets from being taken by the trustee and used to pay unsecured creditors. In an “asset” Chapter 7, the debtor would have non-exempted / unprotected property that the trustee can take and use to pay towards unsecured creditors that would generally be eliminated (or discharged) by the bankruptcy case.

For example, in Mississippi, your homestead equity, or equity of the home you physically reside in, is protected up to $75,000.00. If a debtor owned a single-family home, that was worth $100,000.00 and they had a mortgage totaling only $25,000.00, they would have equity of $75,000.00 and it would be exempted, and the Trustee could not take it. However, Continue Reading ›

Will I lose my house in a Chapter 7 bankruptcy?

Published on: August 13, 2015 | Frank Coxwell

Not unless you would like to! It is understandable to be concerned about your home when thinking about filing bankruptcy to deal with other debt concerns. As long as you are current on your payments, the mortgage company cannot and will not foreclose. They will send out a Reaffirmation Agreement (and more than likely offer you a loan modification as well). The Reaffirmation Agreement is a document where you “sign back up” for your home loan either with the same loan/note details or possibly better if a loan modification is offered.

We also need to check and see if the equity in your home is over the Mississippi exemption or not. If it is not over, your home is fully protected. If it is over, depending upon how much, there will be options to discuss.For example, your home is worth $100,000. You owe $90,000. Your equity is $10,000. This easily falls under the Mississippi exemption ($75,000). But if your home is worth $100,000 and is paid off, then you are over the Mississippi exemption by $25,000 and we would need to discuss options prior to filing your bankruptcy case. It doesn’t mean that you cannot file, it simply means we have some things to take a stronger look at and discuss first.

Exemptions are protections for your property given to you by Mississippi Law. Exemptions are not the same in every state. These protections allow you to keep the stuff that you already have, so you don’t have to start all over again with nothing.

If I file bankruptcy, will I lose everything?

Published on: December 13, 2012 | Frank Coxwell

No. Just because you are filing for bankruptcy, it does not mean you will automatically lose everything you own. You are entitled to claim “exemptions”, which are things that creditors cannot take from you. You must be honest with the Court and include a list of all your assets. To keep your assets, you must list them.

You can expect problems with your case and can lose your property if you do not list it or you are not completely honest about what you own. You must list everything you own, have in your possession, will own in the future, or might have an interest in now or in the future. For example, property you would inherit from a parent in the future, the $5 in your wallet, the car or house that is “owned by the bank”, and your baseball card collection. Everything means everything.

It includes things that you are making payments on (cars, real estate, furniture); things you own with someone else (including your spouse); things that have your name on the title or deed as the legal owner (even if you do not have possession of it); things that you are holding for someone else (college account for your child); things that you may not think have a lot of value (household goods and clothing); and claims you might have against someone else such as a claim for injuries in an auto accident.