Definition - What does Non-Exempt Asset mean?
Non-exempt assets and non-exempt property are items that can be sold by the Trustee in a bankruptcy case to pay down the debts listed in the bankruptcy. Certain items that are considered necessary are exempt such as a house, a vehicle, or any equipment within a business or self-employment venture that is required to continue in the operation. In most states, a family home is exempt from a bankruptcy. The value of the property must fall below a certain amount to be exempted.The same can be said of vehicles. Each bankruptcy jurisdiction has a cap on the amount that is exempt for a vehicle. If the vehicle is worth more than that amount, then it will not be exempt. The Trustee can demand that the debtor(s) pay the difference between the statutory allowance and the value of the vehicle if the debtor(s) wish to keep it.
Justipedia explains Non-Exempt Asset
The bankrupt individual or company has the right to buy back a non-exempt item of property at a value set by the panel trustee. There are certain circumstances where non-exempt property cannot be sold to pay off debt. An example is when the debtor has no equity built up in the property or asset to be sold. In such instances, the Trustee normally allows the bankrupt individual to keep the item. Every chapter of bankruptcy and each state have different sets of rules as to what assets fall into the category of a non-exempt asset.
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