Good Morning Class,
Below are my answers to question “B”.
If the Browns file a petition in bankruptcy, what assets would they be able to retain as
exempt from the claims of their creditors?
When looking at this family and the decision of declaring bankruptcy there are several items that
can be found exempt in their petition. Some of the more common items that can be exempt
would be a family bible, a vehicle up to a certain value depending on the state, jewelry, furniture,
and household goods (Mallor, 2016, p. 831). These types of items are considered essential to
daily living in this household.
Which of their debts could be discharged in a bankruptcy proceeding and which could
not?
This really depends on which chapter of bankruptcy the Brown family is considering. If they are
filing under chapter 7 it is possible for them to have everything liquidated including vehicles and
possibly the student loans. If they file under Chapter 13 they would not be able to liquidate as
much but would be given an extended amount of time into the future to pay the creditors back.
Chapter 13 can be filed when it looks as if there is potential there will be enough future income
to pay back the creditors. To make sure that those who file bankruptcy do not take advantage of
chapter 7 a “means test” was revised in 2005 (Mallor, 2016, p. 827) to prevent individuals from
