Bank Accounts And Chapter 7
Are all funds in a bank account removed to partially pay off creditors in a chapter 7 discharge (in california?). If no, is there a formula used or is it just what the trustee feels you need?
Answer:
The purpose of bankruptcy is to give you a fresh start. The legislature recognizes that a fresh start as a pauper is not much of a start, so they have designated certain properties that you can keep after a bankruptcy. The exemptions from liquidation are many and varied, and they are so generous that I've never had a debtor lose any property. The trustee only has discretion to object if you try to use an exemption improperly. Anything that is not exempt is potentially subject to a Trustee's claim.
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