What is the criteria for a no asset chapter 7 bankruptcy?

A no asset chapter 7 bankruptcy means that there are no assets to liquidate. Meeting the criteria indicates that all existing assets are exempted. Provided the trustee agrees, the petitioner is on their way to a discharge in three to four months.

Exemptions Play a Key Role in a No Asset Chapter 7

The less a debtor owns, the easier it is to be a no asset filing. Exemptions tend to be on the low side, as in $2500 for a vehicle. Having items that have little to no resale value is advantageous. What may be valuable possessions to the debtor may be seen as a pile of junk to the trustee. It is perfectly OK to get the negative opinion. The trustee having such a view translates into an easy chapter 7.

It is still possible to be a no asset case with items that are not completely exempted. A potential scenario could involve owning a car that has an outstanding balance owed. There may be little to no equity in the vehicle, causing the trustee to not want to do anything with it. Instead, the petitioner will have to deal with the finance company in order to reaffirm the debt or not.

Contact a Lawyer

A lawyer is the best person to talk to about the possibility to be a no asset chapter 7. They're familiar with the local courts and what the trustees are looking for in a case. Knowledge such as this increases the chances to have a relatively stress-free bankruptcy filing.