I’m considering filing for Chapter 13 bankruptcy and wondering what happens to my shares in an investment portfolio. Do I get to keep them, or are they at risk? Does it depend on the value or the state I’m in? Any insight would be great.
In Chapter 13, you usually get to keep your stocks since it’s not a liquidation like Chapter 7.
Sidney said:
In Chapter 13, you usually get to keep your stocks since it’s not a liquidation like Chapter 7.
That’s good to hear. Does it matter how much the shares are worth?
Sidney said:
In Chapter 13, you usually get to keep your stocks since it’s not a liquidation like Chapter 7.
That’s good to hear. Does it matter how much the shares are worth?
It does. If the shares exceed the exemption limits, it could increase your repayment amount.
Sidney said:
In Chapter 13, you usually get to keep your stocks since it’s not a liquidation like Chapter 7.
That’s good to hear. Does it matter how much the shares are worth?
Exactly. The trustee will factor the excess value into your repayment plan.
The exemptions you can use depend on your state. Some let you use federal exemptions, which include a wildcard for stocks.
Camden said:
The exemptions you can use depend on your state. Some let you use federal exemptions, which include a wildcard for stocks.
What’s the wildcard exemption? Never heard of that before.
@Jackteagarden
It’s a federal rule that lets you protect up to $1,475 of any property, including stocks, plus unused homestead exemption.
If you’re worried about losing your stocks, consult a local bankruptcy lawyer. They’ll know the specific exemptions for your state.
Kei said:
If you’re worried about losing your stocks, consult a local bankruptcy lawyer. They’ll know the specific exemptions for your state.
Yeah, I’ve been thinking about that. Do most lawyers offer free consultations?
@Jackteagarden
A lot do. It’s worth calling around to see who can help without charging upfront.
@Jackteagarden
Also, some legal aid organizations can assist if money is tight.
Keep in mind, if the shares are in a retirement account, they’re usually protected regardless of exemptions.
Will said:
Keep in mind, if the shares are in a retirement account, they’re usually protected regardless of exemptions.
Mine aren’t in a retirement account, just a regular investment portfolio. Does that make a big difference?
@Jackteagarden
Yeah, retirement accounts have more protections under federal law. Regular portfolios depend on exemptions.
If your shares aren’t exempt and you’re in Chapter 13, you still keep them, but you’ll owe more in repayments.
Clarke said:
If your shares aren’t exempt and you’re in Chapter 13, you still keep them, but you’ll owe more in repayments.
Got it. So basically, I’ll need to factor that into my repayment plan?
@Jackteagarden
Exactly. The trustee will calculate the repayment based on the value of non-exempt assets like stocks.