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What Property can I Keep Under Chapter 7 Bankruptcy?

Posted on March 16th, 2020 by Oddo & Babat, P.C.

Keeping your life intact as much as possible after filing bankruptcy is important and something to consider as you begin your bankruptcy process. Understanding what items you can and cannot keep are important to know so you can prepare for giving up some comforts you may currently have and be used to enjoying.

It’s important that you work with a skilled and experienced bankruptcy lawyer to help ensure you are able to keep as much property as possible. A lawyer can help guide you and get you back on the right path.

What is Chapter 7 Bankruptcy?

People usually refer to chapter 7 bankruptcy protection as a clean slate. This is the case because, if approved, the court wipes all of your unsecured debts clean. When you are way behind on bills and cannot make even your minimum monthly payments, Chapter 7 might be a good option for you.

What Possessions Will I Lose?

It’s important to not dwell on what you might lose in bankruptcy but rather think about what you are gaining – a fresh start to your financial life. It’s also important to understand that you won’t lose everything. There are many items that fall under exempt property that you will be able to keep.

When you file Chapter 7, the court will appoint a trustee to your case. They will review your finances and sell certain items to pay your creditors. Some property will be exempt and the trustee cannot sell it to pay your debts. But be prepared to give up many items in an effort to reduce the amount you owe to your creditors.

These assets which the trustee may sell are called nonexempt property. They might include:

  • Second homes
  • A car that is fully financed
  • Expensive luxury items
  • Valuable art
  • Jewelry

What are Property Exemptions?

Every state provides different types of exemptions to bankruptcy. Generally, you can expect to keep your possessions that allow you to go about your day to day life. These may include:

  • Your home
  • Your car (up to a certain amount)
  • Furniture
  • Appliances
  • Medical supplies
  • Retirement accounts

You may also be able to retain family heirlooms in certain circumstances. To know for sure what is and is not exempt from your bankruptcy, speak with a trusted bankruptcy attorney today.

How Long Does Bankruptcy Stay with Me?

When you file bankruptcy, you must know your financial life is changing. Filing bankruptcy is not giving up, however, it’s simply starting over.

But it might take some time before you can secure credit again for major purchases like homes or cars. When you file Chapter 7 bankruptcy, that will stay on your credit report for 10 years. Chapter 13 bankruptcy stays on your credit report for 7 years.

Don’t let this time scare you. The sooner you determine which path is right for you, the sooner you can start the clock and get back to your financial well being.

An Attorney Can Provide You the Guidance You Need

An attorney, like a  Bankruptcy Law Firm Memphis, TN, can answer all of the questions above and the countless others you may have. Do not settle for a one size fits all solution. Find a firm that provides you with a bankruptcy protection path that is unique to your situation. 

Thank you to the experts at Darrell Castle & Associates for their input into bankruptcy law.

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