Objection To Exemptions
Objection to exemptions is the objection filed by creditors which questions the exemptions that the debtor has filed. This is important since in bankruptcy proceedings, debtors can file for certain assets and items to be exempt from liquidation. There are two kinds of bankruptcy filings: the chapter 7 requires the debtor to liquidate and sell all of their non-exempt assets and use the money to pay off their debts.
Once everything has been sold and given to the creditor, any unsettled debts will then be waived and the creditors can no longer ask the debtor to pay for those. On the other hand, a chapter 13 bankruptcy is a form a restructured payment wherein the creditors will restructure the loan so as to give the debtor to pay off their debts within 5 years or less. What is objection to exemption? Simply put, it is for the chapter 7 bankruptcy wherein the creditors are questioning the debtor and what they have filed as property exempted from liquidation.
Falling Under Debt
There are things people save money for to buy and there are things that they simply need to borrow money for just to be able to afford it. Buying the latest iPhone is easy save up a couple of months and you have enough to buy one. Or you can simply put it on your credit card and be on with it. For things like cars and houses, however, the likelihood of being able to afford one just by saving money for a few months is extremely low. This is why people borrow money and look for loans as there are items that are just too expensive to save up on. Unfortunately, this is also the very reason why people fall too much into debt and eventually file for bankruptcy.
What to do with an Objection to Exemptions
Bankruptcy is a means to protect the debtor from being not able to pay off their debts and protects the creditors from being not paid anything in the end. It is a means to meet an agreeable compromise between the two parties. The debtor will still be able to retain their bare essentials and still maintain a basic living while the creditors will be paid a small but substantial amount which is better than not getting paid at all.
For a chapter 7 bankruptcies, assets that are deemed exempted vary from state to state. Court rulings can also deem assets as exempted depending on the person. This is why creditors file for objection to exemptions when they feel that the debtor is not being fair in filling all possible assets that can be liquidated.
The creditors are given thirty days after the conclusion of the Meeting of Creditors. Afterwards, the application will be subject to a court hearing wherein the debtor must then defend their claims. Legally speaking, the burden of proof will be on the debtor’s side as they must be the ones to show proof that all of their exemptions are legally allowed.