Filing for bankruptcy can be a tough and emotional decision. While it is often considered a last resort, it is also a good option for those who want a fresh start or an opportunity to restructure their debts, getting creditors to work with them. Depending on your situation and income, there are several bankruptcy options. However, one of the most concerning and often confusing issues in bankruptcy is the protection of assets. In some bankruptcies, assets are protected. In others, they are used to pay off the debt. And then, there are some assets that are exempt.
Chapter 7 Bankruptcy requires the liquidation of assets to pay off debt. This can be a scary prospect, as you have worked hard to obtain those assets, and now, due to difficult financial circumstances, your risk losing those very assets to satisfy what you owe. Fortunately, asset liquidation is not as horrible as it sounds. Under Chapter 7, it is possible to hang onto much of your personal property. The following may be exempt, depending on the particulars of your case:
- Your primary residence (up to a certain value)
- Your primary vehicle
- Household appliances
- Clothing and personal items
- Wages
- Retirement accounts/pensions
- Life insurance
- Tools necessary for your occupation
- Worker’s Comp benefits
- And possibly more
If you are facing bankruptcy, contact a qualified bankruptcy attorney to better understand bankruptcy law and its impact on your assets.