Often the first thing people wonder when they are thinking about filing bankruptcy is how much of their stuff they will have to give up.
In most cases, you will be able to keep your most essential assets such as your home, vehicle, furniture and personal property. Very often debtors who file bankruptcy are allowed to keep all of their assets.
Keeping Your Home in Chapter 7
Chapter 7 bankruptcy is the most common type of bankruptcy for individuals. It eliminates all dischargeable debt without having to make a repayment plan. In this type of bankruptcy, you must surrender your nonexempt assets, so the trustee can sell off the property and pay your creditors. Most of the time there are enough exemptions to protect all of your assets, and if not you should probably not file Chapter 7 but instead Chapter 13 bankruptcy.
Never Lose Assets in Chapter 13 Bankruptcy
Unless you choose to sell them, you will be able to keep all of your assets in this type of bankruptcy. You must set up a court-approved repayment plan to pay your creditors for the duration of the bankruptcy, usually three to five years. Once you finish the bankruptcy process all of the remaining debt will be eliminated. You must, of course, continue to pay on your home and vehicles if you wish to keep these assets.
Different states and federal law will have different definitions of what assets are protected or “exempt” from bankruptcy. Your bankruptcy attorney will know whether you should use the federal or your state exemption laws to protect your property.
Bankruptcy is intended to give a debtor a fresh start, if all of their belongings were taken away during the bankruptcy process they would be left in far worse financial shape then they were before filing for bankruptcy.
Talking to a Houston bankruptcy attorney can clear up any confusion on what assets are nonexempt and what you will be able to hang on to after bankruptcy.