The idea of losing assets and property is what stops many people from filing for bankruptcy. However, not filing for bankruptcy in some cases may lead to an even worse outcome. There are certain steps that can be taken in bankruptcy that may protect your assets from being sold off to pay old debt. An experienced Kingsport bankruptcy attorney can help you explore these steps.
How Do I Protect My Assets in Bankruptcy?
Not every type of bankruptcy will take away your property and assets. Even in cases where bankruptcy involves liquidating and selling assets, not all assets will be sold. There are certain bankruptcy exemptions that keep certain types of property and assets from being sold off during the bankruptcy process.
Some bankruptcy exemptions vary by state, while others vary by the type of bankruptcy being filed for. The amount of money or monetary value that is exempt for certain properties and assets also varies by each state. Certain states allow greater monetary exemptions than others.
Chapter 7 bankruptcy functions by selling your property and financial assets to pay back debt. Many people are surprised at how many assets they can keep when filing for Chapter 7 bankruptcy. The existing bankruptcy exemptions often protect a fair amount of assets from being sold.
Chapter 13 bankruptcy does not require you to lose any of your assets. Instead of selling off your assets, you will enter a new affordable payment plan that lets you keep your assets. This plan will give you more time, lower interest rates, and lower monthly payments.
A bankruptcy trustee plays a large role in whether you keep certain assets. The bankruptcy trustee will decide which assets are exempt during Chapter 7 bankruptcy. During Chapter 13 bankruptcy, your trustee will create your repayment plan to keep your vehicle, home, and assets from being sold.
Alternatives to Protecting Your Assets
When you are still at risk of losing assets in bankruptcy, an alternative for stopping this is a reaffirmation agreement. Entering a reaffirmation agreement will prevent certain assets from being sold as long as you make regular payments. This agreement will establish a new affordable payment plan that lets you retain assets that may have otherwise been sold.
It is vital to determine whether you can afford this new payment plan. Failing to make payments could lead to a loss of the assets you were trying to protect. In other words, missing a payment could lead to these assets being sold off to pay back debt.
Other alternatives include negotiating payments with creditors to see if a different deal can be worked out. Sometimes this can lead to lower payments or discounts.
Call Tom Bible Law for Legal Aid
Finding out you might lose your assets and property can be daunting. Try calling us at Tom Bible Law today at (423) 424-3116 for a consultation about what legal steps you can take to protect your financial assets. Our dedicated team of Tennessee bankruptcy lawyers might be able to help you keep your assets from being sold in bankruptcy. We serve clients throughout the Tennessee cities of Chattanooga, Kingsport, and Tullahoma.