Will I Lose My Personal Property If I File For Bankruptcy?

On Behalf of Steele Law Firm PLLC | May 26, 2017 | Blog

The decision to file for bankruptcy is not an easy one, and it is rarely the first choice for many Texas consumers. However, if you find yourself overwhelmed by debt and harassed by creditors at all hours, it may be time to consider this option as a way by which you can reclaim your financial future.

Many people are afraid that filing for bankruptcy could mean that they will lose all or most of their personal property. These misconceptions are quite common, and while Chapter 7 bankruptcy is known as liquidation bankruptcy, that does not mean that you will have to give up your stuff if you file. In fact, many Texas consumers who choose this option find that they are able to keep much more of their property than they originally assumed. 

What you get to keep during bankruptcy

Chapter 7 bankruptcy is a common type of consumer bankruptcy, a popular choice among people who have a significant amount of unsecured debt, such as medical and credit card debt. Bankruptcy law allows for certain exemptions, which means that you may be able to protect some of your most important property, such as:

  • Vehicle worth up to a certain value
  • Household appliances
  • Jewelry
  • Tools of the trade and items you need for work
  • Certain amount of equity in your home
  • Necessary household goods and furniture
  • Clothing
  • Pensions
  • Damages won in a personal injury claim
  • Public benefits
  • Unpaid but earned wages

This is good news for you if fears over what will happen to your belongings are preventing you from making a positive step for your future. While you will find that much of your property is exempt, some of it is not. Non-exempt property generally includes:

  • Valuable collectibles
  • Second vehicles
  • Vacation or second homes
  • Expensive musical instruments
  • Family heirlooms
  • Cash and savings accounts
  • Stocks, bonds and investments

If you are considering bankruptcy, it is always a positive thing to know what to expect. This can make the entire process easier for you and your family.

Fighting for a better future

Bankruptcy is an organized way by which a person can confront his or her debt and secure a better, stronger financial future. An experienced bankruptcy attorney can explain this option and help you decide if it would be in your best interests to file for Chapter 7 bankruptcy protection.

Whether you have fears over what will happen to your possessions or confusion over the bankruptcy options available to you, it is always best to have correct information from a reliable, knowledgeable source. You can do this by scheduling an evaluation of your case as soon as possible.

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