Personal Injury Lawyer
When faced with the possibility you’ll have to file bankruptcy, you could begin to worry about what will happen to your assets. Are you going to lose your house? What about your car? Are your antique family heirlooms going to still belong to you when all is said and done? In many cases, you will be able to keep all or most of your assets, but it could depend on the type of bankruptcy you file.
Filing for Chapter 7 Bankruptcy
When you file for chapter 7 bankruptcy, it’s often referred to as “liquidation bankruptcy.” In chapter 7, you aren’t responsible to pay your debts, but you do have a responsibility to give up your property so a trustee can sell it and repay your debts. There are certain items that are exempt under state law, but it varies from state to state, so that’s something you’d need to look into. Any items that are nonexempt can be sold by the trustee, after which the funds can be used to pay your creditors.
Some items that may be exempt could include your car, some home equity, furniture, clothes, retirement accounts and any tools that are required for you to make a living. There’s a possibility the trustee will look over your assets and your debts, determine the assets aren’t worth enough to cover much debt, and will therefore forego the chance to sell those items. You would then be able to keep it all.
Filing for Chapter 13 Bankruptcy
When you file for chapter 13 bankruptcy, it’s often referred to as “reorganization bankruptcy.” This is because with chapter 13, a court helps you decide how to reorganize your finances so you can pay off all or most of your debts on your own. Unless you choose to do so in order to speed up the process, you are under no obligation to sell any of your personal assets. Instead, you’ll make payments with your disposable income for a certain period of time. After you have satisfied your part of the deal, the remaining debts are typically discharged.
Receiving Legal Assistance
As you move ahead with bankruptcy proceedings, it’s important you understand the two types of bankruptcy and how they will impact your assets. If you’re worried about keeping certain assets, speak with your lawyer about what you can do to achieve that. Contact a bankruptcy lawyer to get started with the process.