Filing for bankruptcy is not a decision you should make without extensive thoughts and consideration and without speaking to a qualified attorney. When you are suffering a financial hardship, bankruptcy is at the bottom of the list of actions you should take. It can allow you to start over financially and better manage your obligations. However, there can be consequences with your credit score and your ability to secure loans. Plus, you could lose some of your property. You should understand these consequences before you get too far in the filing process.
What’s an Asset
When it comes to your bankruptcy case, an asset is anything you own that is worth money. The first thing you’ll likely think of in this scenario is your home or any rental or business properties you own. Vehicles can also be an asset, as can personal items such as jewelry, collections, furniture and clothes. The court will also consider intangible property as an asset. This includes money in your checking and savings accounts as well as retirement funds and life insurance policies.
Chapter 7 Bankruptcy
Individuals filing for bankruptcy will choose either Chapter 7 or Chapter 13. It’s important to understand the differences with these when it comes to your assets. In Chapter 7, you should be able to keep most, if not all, of your assets. Bankruptcy regulations allow you to deem some property as exempt, preventing you from losing it during the proceedings. This type of bankruptcy can also delay the creditor from taking away your car, giving you more time to negotiate repayments.
Chapter 13 Bankruptcy
Chapter 13 can benefit people who have homes, especially those with significant equity in the property. In Chapter 13, you can reorganize your debt and restructure payment arrangements with creditors. This should allow you to keep your home. You also will get to keep your vehicles and pay off the loans.
Stopping Collections Efforts
Filing for bankruptcy gives you a break from bill collectors. Efforts to collect payments for your assets must stop once you file bankruptcy. During this type, you can work on reworking the repayment plans or even lowering the monthly payments you make for these assets.
Filing for bankruptcy does not necessarily mean you will lose your property. In some cases, you can make some assets exempt from these collections efforts. If you are concerned about these issues and prospects of losing assets, talk to a bankruptcy attorney, like a bankruptcy lawyer from Law Offices of Ronald I. Chorches,.