If you do have an asset that is non-exempt, then we will offer you some kind of a solution. The most common solution is sell it prior to filing bankruptcy. Let’s say you have a Mickey Mantle rookie car and it’s worth $1,500, and if we filed bankruptcy for you, we know that the Trustee is going to take that card from you, sell it for $1,500 and give it to your unsecured creditors. Well, we don’t want that to happen. So here’s what we will advise you to do: You sell the Mickey Mantle rookie card prior to filing and spend that $1,500 on reasonable and necessary expenses prior to filing; that is called “exemption planning.”
So, what are reasonable and necessary expenses? Well, how about if you sell the Mickey Mantle rookie card and then pay the rent? You can buy six months of food for your home. You can prepay your electric bill at your home for six months. If you have gas in your home, you can prepay your gas bill for six months. If you need dental work, you can do that. If you have a car that’s exempt that needs some repairs, you can do the repairs on that car. You get to pay your attorney’s fees with that money. There is a long list of things that you can do with the proceeds from the sale of a non-exempt asset prior to filing to make sure that you and your family get the benefit of that money and not your unsecured creditors. So, if you have a non-exempt asset, we will identify it for you and then we will offer you some solutions on here’s what you can do to make sure you get the benefit and it doesn’t go to your creditors.
