People who file for bankruptcy protection under Chapter 7 in Tacoma Wa have to release most of the assets they still have in order to pay creditors. These individuals can keep their house and primary vehicle as long as they are current on payments or own the property outright. Other assets may be exempt from liquidation as well. Regulations about exemptions vary by state. Questions regarding these matters can be asked during a free consultation with a bankruptcy attorney such as Rafal Gorski.
Basic Exemptions
Filing for bankruptcy protection through Chapter 7 in Tacoma Wa is not intended to leave the person utterly destitute. That’s why there are exemptions for the house and car, along with the fundamental possessions the individual needs for a household. The court won’t order this person to sell the bed, couch, refrigerator and dinette set. An expensive hutch filled with valuable antique dishware may be at risk. Washington State does allow Chapter 7 filers to keep $3,000 worth of so-called wildcard possessions, however.
Work-Related Exemptions
Another exemption applies to people who need certain possessions to earn a living. They are allowed to keep up to $10,000 worth of items that are necessary for their self-employment, contract work or regular job. That might include possessions like a laptop computer and printer, auto mechanic tools or building construction tools. Even higher exemptions are provided for people in specific self-employment occupations that require a substantial dollar-value in assets to run. Farming is an example.
What about a boat or an RV? Unfortunately, the court may demand that these assets be sold, but it depends. If the person owns them free and clear, these vehicles may have to be liquidated. If they are not worth very much, they might be exempt. An old canoe might not be worth selling, for example.
If the person has been financing the purchase for such a short time that there is no equity, keeping them might be an option. However, there are also regulations prohibiting buying items on credit and then filing for bankruptcy soon afterward. This raises a red flag that the activity may have been intentional fraud.
