Will I lose my property if I file for Chapter 7 bankruptcy?
The decision to file for bankruptcy is not an easy one to make. Even when dealing with overwhelming debt, there are many reasons why you may be hesitant to take this step.
What will filing for bankruptcy mean for my life?
One reason for avoiding bankruptcy is the fear of losing personal property. However, bankruptcy law provides certain exemptions that allow you to keep many of the things that are important to you. Most applicants are actually able to keep a significant portion of their personal items.
A Chapter 7 bankruptcy is also called a liquidation bankruptcy. This is because many of your assets may need to be liquidated or sold to pay off your debts. Seek a full explanation of what this step will look like for you.
So, what will I get to keep?
Chapter 7 bankruptcy is a popular choice for many people facing overwhelming debt. However, it does require liquidation of certain types of property. Despite this requirement, much of your property may be exempt if it is a necessity of modern life. Even after filing for Chapter 7, you may be able to keep the following types of personal possessions:
- Things that are necessary for your home, such as furniture and appliances
- Necessary clothing and jewelry under a certain value
- Motor vehicles worth less than a set dollar amount
- Any public benefits that you currently receive
- A portion of the equity that you have in your home
- Money from a civil lawsuit settlement
This may be good news for you, but there are certain things that you may have to give up. Some property that is likely not exempt includes the following:
- Second vehicles or second homes
- Vacation properties
- Valuable collections, such as stamps or other collector items
- Any expensive musical instruments you have
- Family heirlooms
Filing for bankruptcy may feel like a time of uncertainty, but it can be extremely useful to understand how the process works. Knowing what you may and may not be able to keep can help you move forward with confidence.
Pursuing a better financial future
Your future may be on the line, but bankruptcy can help you effectively confront your debt, emerge from the process and move forward to a stronger financial standing. If you are hesitant to move forward with a Chapter 7 bankruptcy filing because you think you will lose all of your stuff, you would be wise to get the right information to help you make a beneficial decision for your future.