The two main branches of bankruptcy for consumers are Chapter 7 and Chapter 13. If you are leaning towards using Chapter 7, you should fully understand the effects this branch may have on your property. Evaluating the pros and cons of this branch before using it is always a smart move, and during this evaluation, you will learn how Chapter 7 affects the personal property you own.
The Personal Property You Own
Your personal property includes all the things you own; however, the trustee in your case will not care about most of these things. The trustee is a court-appointed person who reviews, analyzes, and approves your case, and it is the trustee's job to evaluate all the assets you have in your possession and your name.
The assets that matter are those that are valuable. A house, for example, is the first asset he or she may look at. The next asset that trustees look at is a car. If you have a house, cars, or other large or valuable items, the trustee will want to know more about them. Cash and any cash equivalents are also important to trustees.
The Potential Outcome for Your Property
There are only two different things that can happen to your property in a Chapter 7 case. The first option is you get to keep the items. The second option is the trustee takes them from you. The goal when filing is to find ways to keep as many assets as possible. The goal of a trustee is to find as many assets as possible to take. When the trustee takes any item you own, he or she sells the item and distributes the cash to your creditors. By doing this, your creditors may at least receive a small portion of the amount you owe them.
Things You Can Do to Protect Your Property
Your lawyer will look closely at the items you own and will know right away which ones you may end up losing. If there is a way to prevent this, your lawyer will find it. One of the only tools that lawyers use during this process is exemption. You can legally exempt certain values of assets during bankruptcy, and this process may result in you getting to keep the items.
Before you rush into filing, you should carefully examine and evaluate the effects Chapter 7 would have on your life. To find out more about this, meet with a lawyer today.
Share25 February 2020
