It is a Myth That You Lose Everything When You File Bankruptcy
I find it necessary to periodically revisit this topic because the majority of people in this country believe that if they file bankruptcy they will have to give up their home, cars, furniture, underwear and their family dog. This was driven home to me recently at a gathering I attended while on vacation. One person, an educated lady, started asking me questions about bankruptcy law. She could not understand how someone could file bankruptcy and keep anything.
Bankruptcy Options Are Flexible and You Can Usually Keep All Your Assets
What you can keep in a bankruptcy case depends in part on which chapter is filed, and what exemptions (protections) are available under applicable law.
In a Chapter 13 or Chapter 11 reorganization bankruptcy case, you can keep all your assets, but you may have to pay out a certain amount to your creditors through a “plan” of repayment to cover the value of any non-exempt assets.
In a most Chapter 7 cases, you get to keep any assets that are exempt. In the vast majority of cases, you get to keep everything. Why? Because a competent bankruptcy attorney is not usually going to file a Chapter 7 case if you’re likely to lose significant assets by doing so (at least not without first advising you and obtaining your consent).
Start With A Consultation
The best thing to do if you have debts you cannot afford to pay is to have a consultation with a bankruptcy attorney in your state to explore your options. The worst thing to do is to assume you know everything about the law and decide there’s no reason to explore your options.
Image Credit: Maturium
