One of the most common concerns related to filing for bankruptcy is losing assets and property. However, this may not always be the case depending on different factors. Some assets and property are protected from being sold off during bankruptcy. Knowing which assets and property you might be able to keep may help you decide whether to pursue bankruptcy. You can also consult with a Kingsport bankruptcy lawyer to learn more.
How Will Bankruptcy Impact My Assets and Property?
During the bankruptcy process, a bankruptcy trustee will be assigned to your case to determine which assets and property can be sold to pay your creditors. A common myth is that you will lose all your assets and property in bankruptcy. However, this is not usually true because there are several protections in place against this.
First of all, the amount of assets and property lost during bankruptcy depends on how much debt you owe, the type of bankruptcy, and your circumstances. The goal of a bankruptcy trustee is not to make you lose everything to repay debt. Instead, a bankruptcy trustee aims to help you pay back debt and continue to maintain the costs of life necessities.
Not all assets and property are accessible to creditors in bankruptcy. Certain assets and property are deemed exempt from bankruptcy. In other words, anything that is exempt from bankruptcy cannot be sold off or taken from you during or after bankruptcy. However, secured debts on vehicles or homes might lead to repossession after bankruptcy if payments are not made for them.
Certain types of bankruptcy do not even require you to sell assets or property. The main type of bankruptcy that requires people to sell assets and property is Chapter 7 bankruptcy. Chapters 13, 12, and 11 bankruptcy create a new repayment plan for debt. Instead of selling assets, these types of bankruptcy require you to pay a portion of your income to pay off debt after bankruptcy.
Can I Protect My Assets and Property from Bankruptcy?
You might be wondering how to protect your property and assets from being sold in bankruptcy. The bankruptcy exemptions mentioned are one way to do this. Bankruptcy exemptions vary in each state, but the federal bankruptcy exemptions include:
Tools of trade
Unmatured life insurance
Personal injury claims
In other words, bankruptcy cannot take funds from these types of financial assets. Each of these is capped off at certain monetary limits. These may not always stop the repossession of property under secured debt. For those, you may have to sign a reaffirmation agreement or other payment plan to keep those properties from being repossessed.
Contact Tom Bible Law for Legal Aid
Figuring out which assets and property you can keep in bankruptcy can be confusing. You can contact us at Tom Bible Law by dialing (423) 424-3116 for a consultation today about your financial options related to bankruptcy. Our legal team of Tennessee bankruptcy attorneys is ready to help you figure out which assets and property you can keep in bankruptcy. We can be found in the Tennessee cities of Chattanooga, Kingsport, and Tullahoma.