In most cases, you lose little to no property when you file bankruptcy. When people think of “going bankrupt,” they think they will lose their property and be homeless. This is not the case; everyone who files bankruptcy will be able to keep most if not all of their property. The type of bankruptcy you file has an impact on how much of your assets will be kept during bankruptcy. Whether your debts are secured or unsecured and how much of your property is exempt under the bankruptcy law is also a consideration. You may lose any property that you are unable to make the payments or property with a lien against it. In most cases, filing bankruptcy prevents losing your assets.
Chapter 7 bankruptcy divides your assets into two categories, exempt and non-exempt. Usually, the exempt property includes some equity in your home, your car, jewelry, household appliances, furniture, and your clothes. The trustee will not look at the original cost of these items, but at the value at the time of filing. Exemption laws are different in every state. You may also choose the federal exemptions if they are more favorable to your situation.
If you have a large amount of non-exempt assets, you may want to file a Chapter 13 bankruptcy so you can keep all of your assets. Unless you choose to sell your possessions, you will have the opportunity to pay back any arrears. When the bankruptcy court approves your plan, and you will have three to five years to make your back payments. You will have to continue to keep current on your secured debt if you wish to use those assets.
If you would like to know if you can keep all of your assets if you file bankruptcy, contact a Plano bankruptcy attorney to find out how you can get a fresh financial start.