Non Exempt Assets or Property
What does Non Exempt Assets or Property mean?
Non-exempt property is any property or assets which are not exempt from the bankruptcy process and which can be liquidated in a Chapter 7 bankruptcy. There are specific cases where non-exempt property may not, however, be sold and the monies from the sale used to repay creditors. For example, if the debtor has no equity in the property the trustee may choose to abandon it and allow the debtor to keep it. The debtor may also have the right to pay the trustee an amount equal to the nonexempt portion of the asset and "buy back" the nonexempt property.
How is non-exempt property treated? When a debtor files bankruptcy all of their property and assets will become property of the estate. The trustee assigned to the case will evaluate the debtor's property and determine what assets can and should be sold to repay creditors. State and federal bankruptcy laws will determine what assets are considered exempt from bankruptcy. If the property is exempt it is protected and retained by the debtor. If the property is not exempt, it can be sold (in a Chapter 7 bankruptcy).
If you are considering bankruptcy, talk to a bankruptcy lawyer. Some debtors may choose to retain their property and avoid liquidation by filing Chapter 13 bankruptcy and creating a bankruptcy repayment plan.