Bankruptcy law is complicated. The complicated process offers consumers a chance to manage debt that is not manageable. It also poses certain risks – especially for those who do not seek the assistance of an experienced bankruptcy attorney. Figuring out how much of your assets could be seized by the bankruptcy court depends on the type of bankruptcy you file, the total worth of your assets, and how they fit in to bankruptcy law and bankruptcy exemptions. Most people wavering about filing bankruptcy do so because they fear the loss of something they aren’t willing to lose. In many cases, this one thing a bankruptcy petitioner is not willing to lose is their home. If you are worried that you may lose your home if you file for bankruptcy, read on.
Chapter 7 Bankruptcy and Property:
When declaring Chapter 7, petitioners are essentially stating that they do not have the available disposable income to cover their debt payments and need the debt discharged. As part of the Chapter 7 bankruptcy process, petitioners may have assets seized. Seized assets are sold to pay off a portion of the debt owed to various creditors. The thought of property seizure can be terrifying, but it does not have to be a scary process. Not all property can be seized. There are specific assets (cash, home, car, etc.) that, depending on their value, are exempt from the bankruptcy. Generally speaking, assets with equity lower than the exemption amount cannot be seized. In many bankruptcy cases, Chapter 7 petitioners are able to keep their vehicles and house by filing a reaffirmation agreement confirming to the lender that they will still be liable for the loan post-bankruptcy. It’s important to keep in mind when considering a reaffirmation agreement that it means running the risk of losing the vehicle at a later time if you fall behind on payments after the bankruptcy. Your lawyer should be able to spot whether you are at risk of losing anything before you file.
Chapter 13 Bankruptcy and Property:
The Chapter 13 bankruptcy process is different. Consumers agree to a repayment plan to pay off a portion of their debt over 3-5 years. Consumers filing Chapter 13 do not lose their property unless they voluntarily choose to, and as long as they make the agreed payments, and follow the terms of their plan.
So, if you are wondering if it is possible to file bankruptcy and keep your house and your car, the answer is yes. The purpose of bankruptcy law is to provide petitioners with the clean slate they need to rebuild their life. Get in touch with an experienced attorney to discuss bankruptcy exemptions and how it applies to your specific situation.
When you are out of choices and you are overburdened by debt, don’t hesitate to get in touch with Kenneth C. Rannick P.C., Tennessee, and Georgia bankruptcy attorney. We help good people through bad times.