We consulted with a married couple who owned their homestead, 2 cars valued at $3,500.00 (both owned by the husband), and other personal property worth $10,742.74. They had exempt retirement accounts worth $6,074.72.
Collectively, our clients’ debt totaled $257,793.66, which included $82,829.32 of unsecured claims, mostly comprised of medical bills and credit card debt.
Both clients were employed. Their monthly expenses ($4,169.22) exceeded their monthly income ($3,952.04) by $217.18. We filed a joint Chapter 7 bankruptcy case.
Our clients owned non-exempt personal property worth $8,168.02, and were entitled to personal property exemptions totaling $3,000.00. As such, they were $5,168.02 over the allowable exemption limit.
Our clients were thrilled to learn that the trustee abandoned her interest in all of their non-exempt property and filed a report of no distribution. Our clients got to keep 100% of their assets and discharged 100% of their debt!
This case was a good example of disproving the myth that all debtors lose their personal property in Chapter 7 liquidations.