Struggling with debt can bring a host of complex and negative consequences to your life. You may find that you are dealing with phone calls from creditors on a regular basis, past-due notices coming in the mail and much more. In order to effectively deal with these things, you may consider the benefits of filing for bankruptcy.
Choosing to move forward with Chapter 7 bankruptcy is not an easy choice. You probably wonder what this step will mean for your future and what will happen to your personal property. It may be encouraging for you to learn that there are certain exemptions available that may allow you to keep most of your personal property. This allows you to deal with your debt without losing many of your important personal possessions.
Chapter 7 bankruptcy is liquidation bankruptcy. This means that the liquidation of certain assets will go toward paying off some of your debt. However, there are exemptions available. Some of the property that is exempt from liquidation during the Chapter 7 bankruptcy process include:
- Your vehicle, as long as it’s worth less than a certain amount
- Tools and things you need to do your job
- Reasonably necessary furnishings for your home, including appliances
- Necessary clothing and jewelry valued up to a certain amount
- Your pension or public benefits
- A certain amount of equity you have in your home
- Wages you earned but have not yet received
- Damages you won in a personal injury settlement
Bankruptcy law allows you to keep these things because the intent of this process is not to leave you destitute and without personal possessions — it allows you an opportunity to claim a stronger financial future. However, there are some assets you may not be able to keep. Some of these things include:
- Second homes or vehicles
- Cash and certain types of accounts and investments
- Expensive instruments and some family heirlooms
- Valuable collections
You do not want any surprises during the bankruptcy process. Before you move ahead, it’s smart to take steps to learn more about what property is exempt and what is not.
The future you want
Bankruptcy gives you the opportunity to deal with certain types of debt once and for all. If you would like to explore this option and find out if you are eligible for Chapter 7, you may want to start by seeking an assessment of your individual financial situation with an experienced Tennessee bankruptcy attorney.