What Happens to My Property when I File for Bankruptcy?
The Bankruptcy Code allows debtors to exempt real, persona or intangible personal property from your bankruptcy estate. The District of Maine has opted out of the federal bankruptcy exemptions and therefore opted for their own exemptions which relate to personal property of debtors when they file for bankruptcy. Exempt assets are thereby protected under Maine law from being distributed to your creditors.
For example, under some of the Maine exemptions, a debtor may keep the following:
- Any household item (including clothing) that does not exceed $200 in value
- Equity in the primary residence of a debtor up to $47,500 for an individual and $95,000.00 for a couple with minor children or who are over the age of 60.
- Equity in one motor vehicle per debtor up to $5,000.00
- Jewelry up to $750.00 in total value per debtor
- Wildcard for any piece of property owned by the debtor up to $400 in value
Will I lose my home or car?
Property used as security with a home mortgage or motor vehicle loan will not be surrendered by you unless you voluntarily choose to do so. As long as your available equity in your primary residence does not exceed the exemption amount, you can afford to make the payment, and you agree to continue making payments on your mortgage, lenders agree to enter into reaffirmation agreements which continue the debt post-discharge. Motor vehicle lenders will also enter into reaffirmation agreements with you to ensure that you may keep your vehicle and continue making payments.
- What is Bankruptcy?
- What are Bankruptcy Chapters 7, 11 and 13?
- What to Expect at My Initial Consultation
- What Happens after I file Bankruptcy?
- What is a Bankruptcy Discharge?
- District of Maine Bankruptcy information
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