If you file a chapter 13 bankruptcy you get to keep all of your property/assets. This is a reorganization of your debt. While you still have to pay some of the unsecured creditors, it is usually just pennies on the dollar, depending on the facts of your individual case. If you file a chapter 7 bankruptcy, you can keep all property which the law says is “exempt” from the claims of creditors. There is actually a list of exempt property that includes the following (with some restrictions that you will have determine pursuant to your individual facts): Your homestead, $1,000 for equity in a vehicle, $1,000 of personal property (valued at garage sale prices) your wages, and your qualified retirement plans (up to a certain value). If you are over these exceptions, and you desire to keep these assets, you can file a chapter 13, pay the difference you are over in exemptions (and other amounts you are over with your income) and keep your property/assets.
Before filing bankruptcy, either chapter, you need to do some planning to be sure all of your assets are protected and that any debt you are trying to discharge can and will be discharged. Most attorneys offer complimentary consultations; therefore, you should always speak to a qualified attorney to get the answers you need before running the risk of losing assets that could otherwise be protected.
At Schwam-Wilcox & Associates, we have the experience to assist you with your legal issues and help you prioritize and determine what chapter, if any, is best for you and your family.