Bankruptcy can impact your life in a variety of ways. For many people, this is the only way that they can get control over their finances. There are a few things that people need to think about when they’re considering filing for bankruptcy.
One thing that you have to consider is that some of your assets might be liquidated to help cover some of the bills you have outstanding with creditors. If you’re filing a Chapter 7 bankruptcy, this is the only compensation they’ll receive, but it’s sometimes possible to keep all your assets. If you’re filing a Chapter 13, you’ll also have to make periodic payments to the bankruptcy trustee so they can pass those payments along to the creditors.
Many assets are exempt from the process. You can keep the ones that are exempt. These exemptions are often based on the value of the item and its role as a necessity in your life.
Some examples of exempt items include a limited amount of home equity, one vehicle per spouse with equity limits, and personal property up to a specific total with a per-item maximum exemption. Other exemptions also apply, so be sure to find out how bankruptcy law applies to the assets you’re concerned about.
People who are considering bankruptcy should try to determine how the case will impact their future. Part of this is determining what property you’ll be able to keep. Working with a professional who knows about bankruptcy laws can help you to make decisions that you feel are in your best interests.