Asset Protection involves protecting assets (including cash, stocks, real estate, etc.) from being seized by creditors or plaintiffs. The Bankruptcy Reform Act changed the way an individual can file for bankruptcy (Chapter 7 and Chapter 11). Therefore, having a solid Asset Protection Plan in place can be quite beneficial.
For most people filing for Chapter 7 or 13 bankruptcy, protecting bank account funds is a priority . How bankruptcy will affect your cash or bank account deposits depends on whether the money is protected by a bankruptcy exemption and whether you are able to do some pre bankruptcy planning to protect money that is not exempt in bankruptcy.
Is the Money in Your Bank Accounts Exempt?
In bankruptcy, some of your property is “exempt,” which means it does not become part of your bankruptcy estate. In Chapter 7 bankruptcy, the trustee cannot take exempt property, which means you get to keep it. In Chapter 13, your property is safe, but you must pay back the amount of your nonexempt property during the life of your repayment plan.
If part of your cash or bank account deposits is not covered by an exemption, you may still be able to protect some or all of these funds by some careful pre-bankruptcy planning.
If the funds in your bank account are covered by an exemption, you don’t have to worry about losing the money or having to pay it back through your Chapter 13 plan.
As a Florida asset protection attorney firm, we can evaluate your situation, assess your risk and develop an individualized strategy for you and your family. We will guide you through every step of the process, helping to ensure that your assets are protected and your bankruptcy goes as smoothly as possible. Contact us to learn more.