Exemption planning is a form of estate planning where a person exchanges non-exempt property, like cash in a bank account, for exempt property in order to maximize available exemptions and protect your assets.
Exemption planning, while a normal part of the pre-bankruptcy process, should be done with caution. Most bankruptcy courts consider a reasonable amount of exemption planning to be an effective financial planning instrument.
Some bankruptcy courts consider all exemption planning to be fraud against your creditors, and any bankruptcy judge who determines that you have engaged in excessive asset conversion in order to game the bankruptcy process can penalize you or deny your discharge entirely.
If you’re considering bankruptcy in New York, it pays to have experienced legal guidance ahead of time.
At Zelenitz, Shapiro & D’Agostino, we help clients preserve their assets and net worth by using the tools available, appropriately and in good faith.
Call us today at 718-599-1111 to learn how you can protect what’s important to you in bankruptcy.