Will I Lose All My Assets When I File Bankruptcy?
Aug 29, 2017
When someone is thinking about bankruptcy, a huge concern is whether or not they are going to lose all of their assets if they file bankruptcy. There are many myths about bankruptcy and losing all of your property is definitely a misconception. How to properly protect your assets in a bankruptcy depends on whether you are filing a Chapter 7 Bankruptcy or a Chapter 13 Bankruptcy.
CHAPTER 7 BANKRUPTCY
In a Chapter 7 Bankruptcy, you are required to list all of your assets and protect them by using the exemptions allowed in the state you live in.
In the State of Wisconsin, we are allowed to choose between Wisconsin State Exemptions and Federal Exemptions. There are exemptions for homestead, vehicles, household goods, jewelry, tools of the trade, bank accounts and retirement accounts, just to list a few. Most people can exempt everything they own and are able to keep all of their assets.
If there is any property you are unable to exempt, the Trustee can sell the nonexempt property and distribute the proceeds to your creditors. However, the Trustee may offer to let you buy back your nonexempt property if you can afford to do so.
We strongly recommend meeting with an experienced bankruptcy attorney prior to filing Chapter 7 Bankruptcy to ensure that all of your assets can be properly protected and make you aware of any property that is nonexempt. This way you can determine if you are willing to let go of your nonexempt property in exchange for getting rid of all your debts or look into other debt relief options.
CHAPTER 13 BANKRUPTCY
In a Chapter 13 Bankruptcy, you are required to list all of your assets and use exemptions just like in a Chapter 7 Bankruptcy. However, you are able to keep both exempt and nonexempt property in a Chapter 13 Bankruptcy, at a price. Your Chapter 13 plan payment will need to be increased by the same amount as your nonexempt property for the three to five year repayment plan. Whether your assets are all protected by exemptions or if you have nonexempt property, a Chapter 13 bankruptcy is a great way to save your house from foreclosure or eliminate debt when you don’t qualify for a Chapter 7 bankruptcy.
Are you looking into bankruptcy because of medical debt or you want to stop foreclosure on your home? Bankruptcy can be a great option to get the fresh start you need. Pedersen Law Office, LLC offers free consultations and will meet with you personally to discuss your present circumstance, current assets, debts and income to find out what options are available for you. Our law office serves the communities of Appleton, Neenah, Menasha, Oshkosh, Green Bay and their surrounding areas.