Upon the filing of the bankruptcy case, the Debtor’s assets become part of the bankruptcy estate that is formed. However, certain assets can be claimed as exempt pursuant to applicable bankruptcy or state law. The effect of having an asset be deemed as exempt differs depending on which chapter of bankruptcy is being filed.
A creditor or a bankruptcy trustee may file a contested matter in the bankruptcy proceeding to determine whether the asset should be deemed exempt. Some examples are whether a house is entitled to homestead exemption, or whether an account is entitled to an exemption as a retirement account, pension or annuity. The attorneys at Leiderman Shelomith Alexander + Somodevilla, PLLC frequently defends debtors in such actions, and prosecutes these actions on behalf of bankruptcy trustees and creditors.