People who find it necessary to file for bankruptcy often find themselves in that position for a number of reasons, most of which does not involve mismanagement of money. For some people, job loss is the primary cause of needing to file for bankruptcy. For others, it might be medical bills, or other unexpected expenses. The bottom line is that bankruptcy is a tool for people to use when situations beyond their control come together to form the perfect storm that wrecks their finances.
One factor that most people who file for bankruptcy have in common is the desire to overcome the financial stressors that are plaguing them so they can come out of bankruptcy on top. A second factor that seems to be common is the inability to make high bankruptcy payments. That is where Chapter 7 bankruptcy might help South Florida residents. Unlike Chapter 13 bankruptcy, a Chapter 7 bankruptcy covers your debts by using your assets. Those assets are sold off and the funds are used to satisfy debts.
Last week, we talked about the Chapter 7 bankruptcy means test. That is only one facet of this type of bankruptcy that has to be considered. Another facet is what assets you will have to part with as part of the proceedings and what assets you will be able to keep. It is important for anyone who is considering a Chapter 7 bankruptcy filing or any bankruptcy filing to understand property exemptions so they can shelter any asset possible from the bankruptcy proceedings. Because the laws are so complex, having representation that understands the caveats might help you to legally protect your assets. Our page on Chapter 7 bankruptcy can provide more information.