When you file for bankruptcy protection, you may be concerned about what is going to happen to your assets and possessions. You likely own property that you care about, which may include a home, a vehicle, work tools and other personal items. Many people are afraid that they will need to give up this property as a part of a bankruptcy filing.
The reality is, while you sometimes have to give up some possessions to go bankrupt, most debtors are able to keep almost everything they own. It is important to speak with an experienced bankruptcy lawyer if protecting assets is important to you. Ronald D. Weiss, P.C. is here to help, so call today to speak with a member of our legal team.
Bankruptcy and your Assets
You are required to give up your assets as part of a bankruptcy only if you file under Chapter 7 of the bankruptcy code. Chapter 7 allows for discharge of debts without a repayment plan, but creditors will be paid back some of what they are owed with money generated from a sale of assets.
However, even under Chapter 7, there are many assets that are “exempt” from being taken. This means that you can keep these items even if you file for bankruptcy. The state of New York has its own rules on bankruptcy exemptions, and some of the different things that are exempt include retirement accounts like 401Ks and IRAs as well as up to $150,000 in home equity depending upon the county where you live in the state. New York debtors filing for bankruptcy protection are also eligible to elect to use the federal exemptions instead of the state exemptions.
If your property is not exempt, you will not be able to protect it if you file for Chapter 7 bankruptcy. Transferring property or giving away items that you own in the period before bankruptcy is not allowed and the transactions may be reversed or your case dismissed if you try to hide or protect assets.
Consumer debtors, however, do not have to file for Chapter 7. If you have enough money to pay some portion of your debts back even after making your required monthly payments for living expenses, then you can file Chapter 13 instead. Chapter 13 bankruptcy allows you to keep all of your assets but you need to create a repayment plan that creditors agree to and that lasts for anywhere from three to five years in most cases.
Chapter 13 ensures you do not lose any of your valued property or possessions. Many debtors are actually required to file a Chapter 13 instead of a Chapter 7 because they make too much money.
Your bankruptcy lawyer can explain which chapter is the best for you and can help you throughout the bankruptcy filing to protect your assets in any way possible. Call Ronald D. Weiss, P.C. today to speak with a member of our legal team and to learn more.