There are many fears and misconceptions that keep people from moving forward with a bankruptcy filing. Even those who are struggling with unmanageable debt may fear this process because they assume it means they will lose all of their property. In reality, bankruptcy allows people to deal with certain types of balances once and for all while still keeping the things that are most important to them.
Chapter 7 is the most popular option for consumer bankruptcy. It is ideal for individuals who are struggling with certain types of debt, specifically unsecured balances such as credit card bills and medical debt. While Chapter 7 is liquidation bankruptcy, it does not mean that you will have to give up your property. Bankruptcy laws provide ways for you to keep many things you need for a certain continuity of lifestyle.
What can you keep?
The intent of bankruptcy is not to leave you without the things you need for daily life or in a place of poverty. There are exemptions available when filing for Chapter 7 that will likely allow you to keep certain things, such as:
- The tools and things you need for work
- Furniture and appliances that you need to live in your home
- Vehicles that are worth less than a certain value
- Jewelry worth up to a certain amount
- A portion of the equity you’ve built in your home
- Wages earned but not yet received
- Damages from a personal injury claim
- Public benefits and assistance you receive
These exemptions allow you to live much of your life as you did before you filed for bankruptcy. However, you may have to relinquish some of your property for liquidation and the repayment of your creditors. Things you may have to give up include:
- Expensive musical instruments
- Second vehicles or second homes
- Cash, bank accounts, stocks and bonds
- Valuable collections, such as stamp collections
The exact assets liquidated will depend on your specific circumstances.
A better financial future
It won’t be easy to give up some of your possessions, but this can be a small loss compared to regaining your financial footing, getting rid of certain types of debt and being free from creditor harassment. If you are letting fears about your property keep you from taking a step that can be good for your future, you may want to speak with a Louisiana attorney about how bankruptcy works and what you can expect.