Some people think that filing for bankruptcy means that you have to give up absolutely everything that you own. Whether you file for Chapter 13 or Chapter 7 bankruptcy, an individual usually gets to keep many of their personal belongings after going through this process. An experienced New City, New York bankruptcy attorney from our law firm can help you protect as many of your items as possible.
Does Chapter 13 Bankruptcy Affect Personal Belongings?
Chapter 13 bankruptcy is one of the common ways for individuals to file for bankruptcy. This method will not affect your personal belongings at all. It is known as a “wage earner’s plan,” and it is reserved for people who have assets and earnings above the average for the county where they live.
People who file for this kind of bankruptcy keep all of their assets. They just need to submit a plan that will meet the needs of all of their creditors over the next three to five years. So you do not need to worry that a bunch of your personal belongings are going to be sold off.
Does Chapter 7 Bankruptcy Protect Personal Belongings?
Now Chapter 7 bankruptcy is often called “liquidation” bankruptcy, and assets do sometimes have to be sold off here. When some people picture this, they picture being left with absolutely nothing. This is not the case though, because there are exemptions concerning which kinds of assets can be taken by creditors. Many people who go through this type of bankruptcy can actually keep items like:
- Their home
- Their primary vehicle
- Tools that they use for work
- Up to a certain amount of money in most bank accounts
So it is unlikely that you will have to sell off everything that you own in Chapter 7 bankruptcy. In most cases, many of the personal belongings you own will be seen as lacking in value, especially if you have had them for a long time. If an item has depreciated significantly, it is generally not even worth it for a creditor to try and take it from you.
However, if you have a luxury item or two lying around, you can expect that to be taken. A good example of this is if you have a second car that you still owe money on. If this is a premium vehicle with a high price tag, you are probably not going to be able to keep it even if you make the most out of your property exemptions.
Can I Give Away Some of My Items?
If you think that some of your personal belongings are at risk during bankruptcy proceedings, you might think to give them away. Do not do that. There is always a trail to follow, and if it looks like you are hiding potential assets then things are not going to go well for you.
Talk to Our Bankruptcy Attorneys
If you are considering filing for bankruptcy, contact the Lauterbach Law Firm. We can schedule a consultation and answer any questions that you may have. Then we can help you find the best path forward.