For a variety of reasons, many people wrestle with the decision to file for bankruptcy. They may be scared of what their friends and family will think or they may be anxious about what it will do to their credit score and ability to function financially. Many just think that filing for Chapter 7 bankruptcy automatically means forfeiting all of their assets as the bank seizes their home, takes away the car and sells possessions to pay off creditors.
The prospect of filing for bankruptcy may seem like it’s the end of the road, but it can actually be a fresh start for the right person. And, filing doesn’t necessarily mean you are going to lose everything. If it’s done just right, you can save a number of different assets.
- You can keep a car, as long as it falls within a certain value.
- You can keep household appliances.
- You can keep assets related to pensions.
- You can keep some of the equity from the home.
- You can keep furniture and clothing that are deemed necessary.
- You can keep most things that you need to ply your trade.
- You can keep certain jewelry.
- You can keep most public benefits, like Social Security, unemployment and public assistance.
Of course, there are limits. Some things are considered non-exempt, but that doesn’t mean they can’t be saved in some situations:
- Musical instruments, except if you are a musician.
- Second homes.
- Second cars.
- Collections like coins and stamps.
An attorney can help guide you through the complexities and may be able to help you keep some of your property as you get a fresh financial start.
Source: findlaw.com, “Exempt vs. Non-exempt Property Under Chapter 7,” retrieved May 15, 2015