Chapter 7 is probably the most common method for filing bankruptcy. Proper bankruptcy planning can protect many of your assets. However, your non-exempt assets will be sold (liquidated), and the proceeds will be distributed to the your creditors. After the bankruptcy, unsecured debts are discharged, which means they no longer have to be repaid. However, adequately secured debts are not discharged. For example, if there is a mortgage on your home, your home will continue to be subject to that debt. With proper planning we are frequently able to save most of our clients’ possessions from liquidation. The key is to contact us early before one of your creditors obtains a judgment and begins garnishing your wages or attaches your property.
WARNING: We have attended hundreds of bankruptcy hearings and observed people fighting their own bankruptcy battles without the representation of an attorney. Frequently, these people forfeit more money to trustees and creditors than they would have paid a bankruptcy attorney to represent and assist them through the entire process. If you decide to endure the bankruptcy process on your own, be careful. Do your homework well before filing any documents. In virtually all situations, we DO NOT recommend filing for bankruptcy on your own.
Not every individual is eligible for a chapter 7 bankruptcy. If the bankruptcy court determines you have the means to pay your all or some of your unsecured creditors, the court may not permit a chapter 7 bankruptcy. Sometimes a chapter 7 is not in your best interest. You may be better served by filing a chapter 13 bankruptcy. If filing for a chapter 7 bankruptcy is in your best interest, we are highly successful at proving to the bankruptcy court that all basic requirements have been met and then advocating for you through the entire bankruptcy process.
Pre-bankruptcy planning is critical in order to maximize the exemptions to which you are entitled. After filing a chapter 7 bankruptcy, your non-exempt property will be liquidated. Below is a partial list of common exempt and non-exempt property. Call us at Carr Law for specifics on what you can save and what you may lose. Don’t wait to talk with us. The initial consultation is free and will be valuable for pre-bankruptcy planning.
Non-exempt property you will likely lose in bankruptcy:
- – Cash and bank account balances
- – Stocks and bonds in non-retirement accounts
- – A second home
- – A second car, recreational vehicles and trailers
- – Valuable collections, such as stamps or coins
- – Guns
Exempt property you will likely be able to keep in bankruptcy:
- – Your car, up to a certain value
- – Your home, up to a certain value
- – Reasonable clothes
- – Pensions, IRAs, and other retirement accounts
- – Household furnishings, and appliances, up to a certain value
- – Tools of your trade, up to a certain value (example – musician keeps instruments)
- – Jewelry, up to a certain value
- – Damages awarded for personal injury