Common bankruptcy questions we hear include worries on losing major assets such as a home and car. You’re right to be concerned about these things, as you can lose some assets when filing bankruptcy. However, most bankruptcy filers lose absolutely nothing.
You have to look at what got you into this situation, what want to keep, and what you’re willing to lose. Technically, you can keep major assets if you can afford them. You can hold on to your home, vehicle, and valuable assets such as jewelry, even in a Chapter 7 bankruptcy. First let’s go over what you can legally keep, what you may lose, and then how to keep the most assets.
What You Can Keep
If you’ve lived in Texas all your life, or even just a few years, you are legally able to keep the majority of your assets in a Chapter 7 bankruptcy. Chapter 7 is where you file to discharge debts, with the point being some of your assets may be sold to pay back creditors; in other words, you liquidate items to pay debts. Again, it’s rare you actually have assets sold, but a trustee appointed by the bankruptcy judge can do precisely that by law.
Exactly what can you keep?
-You can keep any equity you have in your home, as well as all home furnishings up to $30,000.
-You can also keep jewelry and heirlooms up to $7,500.
-Bicycles, guns, and sporting equipment are usually exempt.
-You can keep your car usually, sometimes more than one if multiple family members have cars and depend on them.
-Social security benefits are always exempt, as are retirement accounts.
By law, child support and back taxes cannot be discharged in personal bankruptcy. If you’re hoping to discharge these debts, Chapter 7 simply will not work. You are legally bound to pay them. But as you can see, the majority of your major assets can be exempt.
Advantages of Texas Chapter 7
Most are eligible for Chapter 7 bankruptcy, but if you make a lot of money, you may be required to create the debt repayment plan involved in Chapter 13. Chapter 7, as earlier noted, discharges debts and is far more common than Chapter 13. You can in most cases keep your home. If any assets such as your car or home are not exempt, you can legally pay the court appointed trustee in order to keep it; that means you can pay on certain debts. You just have to have the money do so.
Chapter 7 bankruptcy has the most direct effect of any bankruptcy filing. It can eliminate the majority of your major debts and give you a fresh start. It only takes a few months to go through. And an experienced Texas bankruptcy attorney in your area can help with topics such as exempt and nonexempt assets.
Advantage of Texas Chapter 13
Chapter 13 is less effective in removing your debt obligations, but you can use it to save assets. In some cases, Texas filers who make more than the state average are not eligible for Chapter 7. Don’t worry: Chapter 13 has its own advantages. It’s the best way to stop a foreclosure before it happens. As long as no foreclosure papers have been filed, you can file Chapter 13, a judge will put an automatic stay on your home, and you can start making more affordable payments on it. It’s the same with all your assets. Nothing will be sold. You will create a debt repayment plan in order to make these debts affordable.
Keeping Assets – The First Step
You need an experienced Texas bankruptcy attorney to look over your situation. He or she can go over eligibility, exempt and nonexempt property, help you keep assets with Chapter 7, and help you save your home from foreclosure with Chapter 13.