Asset Protection During Chapter 7 Bankruptcy

Experienced Chapter 7 bankruptcy Lawyers

Q: Can I Keep my Property if I file for Bankruptcy?

Answer:  Usually you can keep your property if you choose to file for Chapter 7 or Chapter 13 bankruptcy. Certain property is called “exempt” (that means protected) assets. When filing for chapter 7 bankruptcy, you are allowed to keep those items that are exempt when filing for bankruptcy protection. The concept behind exempt items is that you will need certain basic items in order to make a successful fresh start after filing for chapter 7 bankruptcy protection.

If you are holding off filing bankruptcy (be it chapter 7 bankruptcy or chapter 13 bankruptcy,) because you fear that you will lose everything you own to liquidation because of filing bankruptcy, you should get the real facts.  Contact an experienced bankruptcy lawyer as this is not the case. Many people delay taking effective action through bankruptcy because they have heard that in order to be relieved of responsibility to pay, they will have to sacrifice their personal possessions to satisfy as much of their debt as possible.  Basically they are being told that if they file bankruptcy, they will lose everything.  This is not true!   Bankruptcy is designed to help you, not put you in additional financial difficulty.  A beneficial idea would be to hire an experienced bankruptcy attorney who has in depth knowledge of the Federal Bankruptcy Code, an experienced bankruptcy attorney can protect the majority of your assets when filing for bankruptcy protection. 

Chapter 13 Bankruptcy and Your Assets

If you choose a Chapter 13 bankruptcy, you will be able to keep more assets but will have to establish a plan to pay back creditors with future earnings.

If you choose Chapter 7 bankruptcy, you will keep fewer assets but a debtor can obtain a discharge more quickly.

Under state and federal law, you can claim bankruptcy exemptions that will protect your assets against the claims of creditors. The bankruptcy trustee who is assigned to your case will review all of your property and financial assets to determine what can be liquidated. Any sums from liquidation in a bankruptcy will be distributed among your creditors. Your bankruptcy attorney will work to use the legal exemptions to ensure that your bankruptcy ends up as what is known as a "no asset case," one where nothing in the debtor's personal estate is sold.

There are ways of protecting your assets when filing for bankruptcy protection.  The rules are there and it is best to seek the assistance of a qualified bankruptcy lawyer to interpret the laws and help you make the best decisions while filing for bankruptcy protection.