Chapter 7 bankruptcy is often called a liquidation bankruptcy. A court-appointed trustee will examine your assets to determine if any non-exempt property is valuable enough to be sold and the proceeds distributed to your creditors.
Certain exempt property can not be sold, and you will be able to keep them throughout your case. The trustee can only sell non-exempt or property that has a value that exceeds the monetary limits of your state. Most people lose little to no property in bankruptcy.
If a portion of your property is exempt, the trustee can sell it and give you the value of the exempt property, or you can do the opposite and pay the trustee the value of the non-exempt property and keep the property. A bankruptcy lawyer can help you negotiate the exemption laws in your state. Your attorney can also help you choose the federal exemptions if your state allows you to choose.
At the end of Chapter 7 bankruptcy, most of your secured debt will be eliminated. The discharged debt usually includes credit card debt, medical bills, payday loans, late utility bills, and personal bills. Chapter 7 rarely helps with secured debt like your home mortgage. If you are behind in your home payments, you may want to file Chapter 13 to keep your home and the rest of your assets.
If you have questions about bankruptcy and how Chapter 7 can give you a fresh start, contact a Fort Worth bankruptcy attorney today to find out how to keep your assets and eliminated debt.