A No Asset Case in a Chapter 7 Bankruptcy

Long & Long Team

A no asset case in a Chapter 7 bankruptcy is the usual goal for a debtor. Why? A no asset case means you have no financial obligation to the bankruptcy estate. Unlike a Chapter 13 bankruptcy where you must make payments for three to five years.

Who Makes the Determination of a “No Asset” Case?

The Chapter 7 Trustee will make the determination. When your Chapter 7 bankruptcy case is filed, a Trustee will be appointed. The Trustee will look at all of your assets listed in the bankruptcy schedules, your recent tax returns, bank accounts, and your answers on the Trustee Information Sheet. The Trustee will also consider input from creditors at the meeting of creditors or otherwise.

The Trustee is looking for non-exempt assets. Therefore, it is necessary to properly claim exemptions for qualified property in Schedule C. Exempt assets cannot be required to be turned over to the Trustee.

Typical non-exempt assets include upcoming tax refunds, 20% of net wages owed at the time of filing, and non-exempt amounts in bank accounts. Pre-bankruptcy planning by your bankruptcy attorney may include waiting to file until you receive and spend your tax refund.

Less typical are home equity and vehicle values beyond the exemption amount. This is becoming more common as an asset, however, due to skyrocketing home and used car prices.

Do You Always Want a No Asset Case?

Sometimes it is better to file the case even though there may be assets to administer. Filing to stop a wage or bank garnishment is an example. Another is you may owe taxes that are non-dischargeable. Taxes are often given priority in distribution. Hence, the money that is paid into the estate can be used to pay off the taxes that are owed.

In any event, you need an experienced bankruptcy attorney to determine the time to file and the necessary pre-bankruptcy planning.

Client Reviews

Marty is absolutely compassionate, understanding and very upfront person. Very professional and EXCELLENT in what he does. When I ran out of options to keep up with our financial obligations during COVID 19...

George S.

Marty Long was able to navigate my difficult case and get me the best case scenario outcome. In addition, I am extremely pleased that there were no additional costs from the original estimate Marty gave to me...

Tony R.

Martin was extremely helpful with our bankruptcy. I pelted this guy with so many questions and had to have filled up his email a billion times and he helped me understand the process to feel confident in our...

Kayla R.

Contact Us

Fill out the contact form or call us at (303) 832-2655
to schedule your free consultation.
  • phone.png Free Consultation
  • availabilty.png Former Bankruptcy Trustee
  • no-fee.png Call Now (303) 832-2655

Free Consultation (303) 832-2655