Whenever an individual is suffering from a significant amount of debt, he or she may find it beneficial to determine the options available to stabilize finances. In some cases, filing for bankruptcy may be the best solution. Many Louisiana residents who consider filing may wonder what will happen to their assets and investments. By choosing Chapter 13 bankruptcy, many types of investments are left untouched by creditors.
When filing for Chapter 13, a person is put on a payment plan that allows him or her to pay back what they owe over a set number of years. This plan, which is proposed by the individual and must be approved by the court, restructures finances and works with a person's income levels so that debts may be repaid efficiently. This option also typically prevents total asset liquidation.
Many different types of investments are off limits to creditors during a bankruptcy. Investments such as 401(k) plans, real estate, self-employed plans and some types of pensions are usually exempt from seizure. Other investments such as profit sharing and employee stock purchase plans are typically not exempt, however, and may be seized to repay creditors if applicable. This can also be true for individual stocks.
Whether or not a person decides to file for Chapter 13 bankruptcy, consulting an experienced Louisiana bankruptcy attorney could help determine the best way to get one's finances back on track. An attorney could assess the individual circumstances and then propose a solution based on the best fit for the client's financial situation. In addition to providing more information about the different forms of bankruptcy, an attorney could assist a client throughout any related legal proceedings.
Source: fool.com, "Can Creditors Seize My Investments During Bankruptcy?", Sarah Szczypinski, July 19, 2017