Filing for bankruptcy is never an easy decision, and there are many reasons why Tennessee consumers are hesitant to take this step. There are many negative connotations associated with bankruptcy, but in reality, it is a smart step for many individuals who find themselves overwhelmed by debt.
One of the main reasons that people do not file for bankruptcy, even when they are unable to keep up with their debt, is because they are afraid that they will lose their property. In Chapter 7 bankruptcy, one of the most common types of consumer bankruptcy, it is possible that important property could be exempt from liquidation. This means that you may not have to give up your home and other valuable assets.
What can I keep?
People who file for bankruptcy protection under Chapter 7 do so because they cannot manage their debt without assistance. While Chapter 7 is technically liquidation bankruptcy, it does not mean that the applicant must sell everything that he or she owns. Fortunately, bankruptcy law allows some property to be exempt from the liquidation process, which can include:
- Vehicles up to a certain value
- Necessary clothing
- Necessary household goods
- Household appliances
- Money from a personal injury lawsuit
- Jewelry up to a certain value
- Tools of the trade
- Some equity in the home
- Public assistance
- Potion of unpaid but earned wages
Bankruptcy allows applicants to escape the heavy burden of unmanageable debt while still keeping property needed for everyday life. It is reasonable to have concerns about what will happen to your stuff in Chapter 7 bankruptcy, but you may be able to keep more than you realized.
As expected, not all property is exempt in bankruptcy. Some property typically not exempt from liquidation includes:
- Expensive musical instruments
- Stamps, coins and other valuable collections
- Cash, stocks, bonds and other investments
- Second vehicle
- Second residence or vacation home
If you believe that bankruptcy could be a beneficial step for you, you would be wise to seek a complete understanding of how the process works and what property is exempt. A case evaluation with an experienced attorney will determine if you are eligible for Chapter 7, and you can have the legal support you need to effectively navigate this legal process.
Crushing debt may have taken over your life, but bankruptcy could be the way that you reclaim it. You have the right to protect your financial interests in the future and learn your legal options today.