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Don’t panic about your property when filing for Chapter 7

| May 8, 2020 | Uncategorized

Making the choice to file for bankruptcy protection is not easy. If you find yourself moving forward with this process, you probably have some significant concerns about how this process will impact your future. Like many others who consider bankruptcy, you may wonder if this choice will require you to give up your property.

The intent of bankruptcy is not to leave you destitute and without the things you need for daily life. It is to allow you to discharge certain balances and deal with your debt in a reasonable and organized manner. If you file for Chapter 7 bankruptcy, there are property exemptions available that will allow you to keep the things you need while still benefiting from the protection this process provides. 

What can you keep?

Chapter 7 bankruptcy is liquidation bankruptcy, which means you may have to relinquish some assets to sell for the purpose of repaying creditors. However, there are various exemptions available that will likely allow you to keep the things most important to you. Some of these include:

  • Things you need for work and tools of the trade
  • Reasonably necessary appliances and furniture
  • Jewelry
  • Personal vehicles worth less than a certain dollar amount
  • Portion of the equity you have in your home
  • Your pension and unpaid wages you’ve already earned
  • Damages from a personal injury settlement
  • Public benefits

These exemptions will allow you to keep the things you need for a normal life and to provide for your family. Some of the non-exempt forms of property you may have to give up when filing for Chapter 7 bankruptcy include: 

  • Valuable collections, such as stamps
  • Expensive musical instruments, unless they are for work
  • Second home or vehicles
  • Cash, stocks and bonds
  • Family heirlooms

Under Chapter 7 bankruptcy, you will be able to discharge certain balances associated with unsecured debt, such as credit card debt and medical debt. While giving up some of your property may seem unthinkable, this process could allow you to reclaim a better financial future for yourself and family. 

Learn more before you decide

Filing for bankruptcy is a major decision. Before you choose what you want to do, you may find it beneficial to speak with an experienced Texas bankruptcy attorney regarding your options. You can also discuss how Chapter 7 will impact your life, such as your property and important belongings.