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Questions about No Asset Cases

What is a no asset case?

A no asset case is a bankruptcy case in which a person does not have any sort of assets that can be sold or used in any way to pay creditors. The goal of filing for bankruptcy is usually for people to protect their assets. A no asset case is commonly called a Chapter 7 case.

If a person files for a no asset case bankruptcy, but they activate a credit card with a small amount of money after they have filed, will their case be dismissed?

Usually, a court will not fret about small amounts of money, and they most likely will not dismiss a person’s case over it. A person is technically not supposed to activate and develop new debt before their case has been looked over and discharged, but if it was a small amount of money, it is possible that the person could just set aside the card until their case has been resolved. If the card has already been used, it has more than likely not even been noticed by the court because of its small amount. It is advisable, if the person has an attorney, to inform them and get their advice on the situation, but the person should not be in much trouble if the amount was small.

Are creditors required to discharge a debtor even if the creditor was never notified or included in a case?

The rule for no asset cases is that every debt that the debtor had at the time that bankruptcy was filed for will be discharged. This includes any creditors that were not listed or notified. If it was a case with assets and the assets were gathered and distributed to the creditors, the opposite would be true. In a no asset case, the debt would be discharged for that particular person filing for bankruptcy, even if there was no information about a certain creditor on the list for that bankruptcy.

If someone just closed a no asset case and was allowed to keep their house, but they want to fix it up and sell it, how would they go about doing that without challenging the trust of their former trustee for their case?

If a case has been closed and a trustee has officially abandoned a house and the people that own it, that trustee will not come back and try to claim it. The only way a trustee would come back to a property is if the people who own it lied about the value of the actual house. In order to be safe and avoid the very rare chance that the trustee of the closed case will come back once the owners are trying to sell it for more than they originally told them it was worth before the renovations, would be to have an appraisal done to the house before renovations begin. This would provide proof to the trustee that no lie was made about the value of the property and that the value of the house increased after the case was closed and the property was abandoned.

If a person goes through a no asset case and includes their mortgage and homeowner’s insurance in the case but the mortgage holder is still requesting payments, what should this person do?

The best answer would be not to worry about the notifications of the mortgage company about payments that the person is apparently supposed to be paying according to the company. If a person has included their mortgage and homeowner’s insurance on the bankruptcy, then the creditor, in this case the mortgage company, is not allowed to collect mortgage or any other type of payments that have to do with the house.

No asset cases for bankruptcy can be very advantageous. Some creditors do not really want to follow the rules, however, and may try to squeeze money out of a debtor even if the case is a no asset one. There can be a lot of questions that appear when dealing with no asset cases, and it may be a good idea to seek help when these questions come up. Ask the Experts when these questions arise, or if any other questions come up, and they will do their best to answer.
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