Ways to Avoid the Loss of Family Heirlooms or Similar Items
You have a necklace or a brooch that belonged to your grandmother. It’s worth a lot of money, but you would never sell it because of the sentimental value. Maybe you have a rare book collection that you’ve built over decades. You’re struggling to meet your financial obligations, but you don’t want to lose a lifetime’s work by selling it to pay creditors or giving it up in bankruptcy. What are your options?
The Liberal Texas Bankruptcy Exemptions
When you file for bankruptcy protection, you can claim certain property as exempt from the bankruptcy estate under either federal or state law. Because Texas has the most liberal exemptions in the country, most people filing for bankruptcy in the Lone Star State claim the state exemptions. Individuals can claim up to $50,000 in personal property and couples can protect up to $100,000 of personal property.
What Can You Do If the Value of Your Property Exceeds the Amount of the Exemption?
To prevent the loss of property to the bankruptcy estate, you may reaffirm a debt, provided you still owe money on an asset. For example, if you have a car or home with a note attached, you can agree to keep making payments in exchange for the right to keep the property.
What about selling the property before the bankruptcy and buying it back after the bankruptcy? This can potentially be done, but it must be done the right way or you risk committing bankruptcy fraud. To comply with the law, you must sell the items in an arms-length transaction. The amount paid must be fair market value and the terms must be the same as those you would give to any third party. In addition, the proceeds must go into your bankruptcy estate and be accessible to creditors.
Contact an Experienced Rockwall, TX Bankruptcy Attorney
Let us help you take the right steps and make good decisions when filing for personal bankruptcy protection. At the Law Offices of Carrie Weir, all potential clients are entitled to a free initial consultation. To arrange an appointment, contact my office online or call 972-772-3083. I handle Texas personal bankruptcy filings in Kaufman County, Rockwall County, Collin County, Dallas County, Hunt County, and the surrounding counties.
