Keeping Assets in Bankruptcy

When bankruptcy comes to mind, you may think of your creditors taking all of your property to pay your debt. When actually, most of the time, you will lose little to none of your property when you file bankruptcy.

Bankruptcy can be a way to keep your possessions like your home or your car if you get behind and worry you are about to lose your collateral. Chapter 13 allows you to gradually repay your debt over a period of three to five years while keeping all of your assets.

Chapter 7

Most of the time, you will keep all of your assets due to exemptions. If you have very valuable property or the property has a lien, and you cannot afford to keep up on the payments, these items may be given over to the trustee to sell. The trustee will distribute the money to your creditors.

Exemptions

Your state allows a certain amount of exemptions. These exemptions are untouchable by creditors. Some of these include the equity in your home, equity in your car, clothes, household furnishings, and jewelry. If your state allows you to use the federal exemptions, instead, they may be more favorable to your situation.

When the trustee is valuing your property, they will consider what the property could be sold for and not the original cost. If you have exempt assets that you are worried could be lost or seized in bankruptcy, Chapter 13 may be the best cause of action for you.

If you are considering bankruptcy and would like to know if you can keep all of your assets while eliminating debt, contact a Hidalgo County bankruptcy attorney today.