We are filing Ch 7 bankruptcy my husband is a heavy equip mechanic with thousands of dollars of tools. How much can we have as tools for trade?He has to have these tools to keep his job. If...
We are filing Ch 7 bankruptcy my husband is a heavy equip mechanic with thousands of dollars of tools. How much can we have as tools for trade?
He has to have these tools to keep his job. If he does not have these tools he will loose his job. The company he works for does not supply tools for him. I was told the amount was 2500.00 if that is the case what is the chances the court is going to take them.
Chapter seven bankruptcy is the liquidation of nonexempt assets to satisfy debts to creditors compared to a reorganization of the total debt. For the most part the items to be liquidated or sold are items that you have that were financed. Cars, houses, boats, and the like would be liquidated first assuming that you still owed money on the note.
The exact terms of the bankruptcy will be decided by the bankruptcy court. If you liquidated enough property like a house etc. first and paid off your debt, the tools may remain safe, you could keep them. If however, you sold all the assets and the proceeds received were not enough to satisfy the debt, then the tools may also fall victim to sale.
However, most bankruptcy courts realize that if your profession requires you to have these tools of the trade in order to make a living, the tools will be liquidated only as a last resort to pay off the debt. The court doesn't want to take away your ability for earning power, and in this case if the tools were sold it would do exactly that.
I suggest you contact a local bankruptcy lawyer to assist you.