The choice to file for bankruptcy is not an easy one to make. Chances are that you have been dealing with past-due balances, phone calls from creditors and constant contact from debt collectors for a while. Perhaps you have even lost hope that there is a better financial future out there for you.
If you feel this way, you are not alone. Thousands in Texas find themselves struggling with debt and strained financial situations for various reasons, but there are options available to you. By filing for Chapter 7 bankruptcy, you can deal with certain types of debt and make contact from creditors to stop — but what will happen to your personal property?
Misconceptions about bankruptcy
Many people misunderstand bankruptcy. They think that, by filing for bankruptcy protection, they are signing away all of their personal possessions in order to pay off debt. In reality, bankruptcy law provides certain types of property exemptions that can actually allow you to keep many of the things you hold dear. Seeking a better financial future does not have to come at the cost of losing all of your stuff.
Exempt versus non-exempt
Certain types of property are exempt from liquidation during Chapter 7 bankruptcy. Essentially, you can keep many of the things you need for your job or for daily life. This includes things like clothing, personal jewelry, equipment you need for work, personal injury damages and much more. You can also keep your furniture and things you need in your home, such as appliances.
There are certain assets, however, you may have to give up. The liquidation of these things will go to pay down some of your balances to various creditors. Non-exempt property typically includes things like second cars, vacation homes, valuable collections, musical instruments, investments, cash and a few other things.
Avoiding unpleasant surprises
The bankruptcy process is complex, and you want to do everything in your power to avoid unexpected surprises. Find out beforehand what you can keep, and learn as much as possible about what to expect from the Chapter 7 bankruptcy process. You can do this by seeking a complete assessment of your case as soon as possible.
Not everyone is eligible for Chapter 7 bankruptcy. There are strict requirements for individuals filing for this type of protection, but if you are not able to move forward with this specific chapter, there are other options available to you. It is in your interests to seek an individual evaluation of your case before moving forward.