Filing for bankruptcy can seem like an intimidating, worrisome process, especially if you’re concerned you’ll lose your personal property as a result. However, bankruptcy isn’t designed to strip you of your property; it’s actually intended to protect your assets and rights.
You’ve spent considerable time, effort, and money acquiring the things you own, and though you might be struggling financially right now, you deserve to keep your possessions. Below, Ron Lunquist, Attorney at Law, discusses what typically happens to personal property when you file for bankruptcy.
Chapter 13 Bankruptcy
When you file under Chapter 13, you’ll keep every piece of property you own, regardless of whether it’s exempt. You’ll agree to a three- to five-year repayment plan, which is designed to allow you to pay off either a portion of your debt or all of it, depending on your discretionary budget. Once you complete your repayment plan as agreed — even if you still owe money to individual creditors — the remainder of your dischargeable debts will be wiped out.
Chapter 7 Bankruptcy
When you file under Chapter 7, you won’t be required to pay back any of your dischargeable debts.In very rare cases, you may need to give usually minor non-exempt property over to a bankruptcy estate. That said, Chapter 7 bankruptcy has many property exemptions, each with its own limit.
In almost every case, individuals who file under Chapter 7 do not own any non-exempt property, and everything you own is protected. If you fall into that category, you’ll get to keep your possessions. State exemption laws are also designed to protect some of your equity up to a certain value when you file under Chapter 7, including:
● Equity in your home
● Your vehicle
● Retirement accounts
● Tools of your trade
● Household property
For more detailed information on bankruptcy exemptions in the state of Minnesota, it’s best to consult with a knowledgeable, experienced bankruptcy attorney.
How Filing for Bankruptcy Protects Your Income and Assets
If you’re facing serious debt and struggling to repay what you owe, filing for bankruptcy can be incredibly helpful in getting you back on your feet. Though bankruptcy often carries a stigma, it’s not as bad as many people have been led to believe.
Rather, when you file for bankruptcy, the court issues an automatic stay, which halts collection activities while you reorganize your debts or rebuild your finances. This stay protects you from many actions, including but not limited to:
● Home foreclosure
● Vehicle repossession
● Disconnection of your utilities
● Most evictions
● Ongoing collection attempts on debts you incurred before you filed
● Wage garnishments
● Bank levies
Though filing under Chapter 7 or Chapter 13 will affect your credit, bankruptcy is not designed to negatively impact everything in your life. Rather, it’s intended to allow you to get your ducks in a row, while you work toward improving your financial stability.
Ron Lundquist, Attorney at Law: Your Twin Cities Source for Bankruptcy Expertise
If you’re considering filing for bankruptcy, don’t hesitate to reach out to Ron Lundquist, Attorney at Law for assistance. When your debts feel overwhelming, you have options. And with the guidance of a knowledgeable, experienced attorney, please know that it’s more than possible to start fresh. To schedule a free consultation or learn more about how I can help you, feel free to call my office today at 651-454-0007 or send me a message with your questions.