One of the primary reasons why consumers are reluctant to file for Chapter 7 bankruptcy are fears over whether they will have to give up their personal property. If you are struggling with debt that you can no longer manage, bankruptcy could offer you a way to deal with certain types of debt once and for all. However, you may believe that taking this step could place you in a position in which you may have to give up certain valuable possessions in order to move forward with the bankruptcy process.
Chapter 7 bankruptcy is a popular option for consumers for many reasons. It only takes a few months to complete, and it results in the discharge of different types of unsecured balances, including credit card debt and medical bills. It is also liquidation bankruptcy, which means that it will require the liquidation of some assets. This does not mean that you will lose some or all of what is most important to you.
Bankruptcy exemptions available to you
Bankruptcy laws include certain exemptions to those under Chapter 7 bankruptcy protection. While you may have to give up some of your personal property, these exemptions will allow you to keep many of the things that are important to you and are necessary for everyday life, including the following:
- Personal vehicle you need for daily life and worth under a certain amount
- Equipment and tools you need to do your job
- Appliances and furniture you need in your home
- Reasonably necessary clothing and personal items
- Some of the equity you have in your home
- Pensions and public benefits you are receiving
- Jewelry worth up to a certain amount
- Damages awarded in a personal injury suit
Assets that you may not be able to keep in a Chapter 7 bankruptcy filing includes collections, second vehicles or homes, cash and bank accounts, family heirlooms and more.
Is bankruptcy right for you?
Bankruptcy is a process that allows you to confront a debt issue in an effective and organized manner. While under Chapter 7 bankruptcy protection, you will not have to endure further contact from debt collectors and creditors, and collections processes against you will stop. If you are unsure if how Chapter 7 bankruptcy could benefit you, it may be helpful to seek an assessment of your case in order to understand the options available.