It’s never easy to reach a point where you think it’s necessary to file for bankruptcy. This was probably not your first choice, but perhaps you’ve decided this is the best way for you to get out from under the debt burden that has been weighing you down. One of the main reasons why you were hesitant is because you were afraid of what this would mean for your stuff.
People often think that filing for bankruptcy means they will lose their belongings. Chapter 7 is liquidation bankruptcy, which means that it could require the sale of some of your assets. However, bankruptcy laws provide exemptions for certain types of property, which means you will likely be able to keep a majority of your things. The point of bankruptcy is to provide a way out of debt, not leave a person destitute and without personal property.
What can stay?
There are specific exemptions that will allow you to keep certain things, even in Chapter 7 bankruptcy. Generally, these items are necessary for your everyday life. Some of the assets you will likely be able to retain include:
- Things you need for work and tools of the trade
- Appliances and necessary furniture
- Reasonably necessary clothing
- Your jewelry
- Vehicles worth less than a certain amount
- Some of the equity you have in your home
- Unpaid wages that you’ve already earned
- Damages awarded to you through a personal injury claim
- Benefits and public assistance you receive
What will you have to give up?
One requirement of Chapter 7 bankruptcy is that there are certain things you will have to give up. Some of the property that is not exempt from liquidation during bankruptcy includes:
- Second homes or personal vehicles
- Valuable collections and heirlooms
- Cash, stocks, bank accounts and investments
- Expensive musical instruments you own
The benefits of bankruptcy
For some Louisiana consumers, Chapter 7 bankruptcy offers a way to financial improvement by discharging certain types of unsecured debts. If you are unable to pay your debt, debt collectors are calling you and you have no way of resolving this problem on your own, you may find it beneficial to explore this option as a reasonable way to address the issue. An assessment of your financial situation can help you see if this is the right way forward for you.