When filing for bankruptcy protection, you always get to keep all property which is “exempt” from creditors’ claims. “Exempt” means that you will be permitted to retain the property by operation of law. There are certain issues to keep in mind when determining what is exempt and if it can get complex. Where furniture or vehicles are concerned, you need to look at your equity in the property, which means you subtract any money that you owe on your mortgage or lien from the value (what it would sell for today). The equity is thus protected as allowed by law, via exemptions. Although your exemptions will allow you to keep property in a Chapter 7 bankruptcy case, they do not change the right of secured creditors (i.e., mortgages or vehicle loans). In a Chapter 13 bankruptcy case, you can keep all of your property, as long as your plan meets the requirements of the bankruptcy law. Whether you are considering Chapter 7 or Chapter 13 bankruptcy, it is important to consult with an experienced bankruptcy attorney who can assist you in achieving the best financial results.
This blog should be used for informational purposes only. It does not create an attorney-client relationship with any reader and should not be construed as legal advice. If you need legal advice, please feel free to contact me at udallshumway.com or an attorney in your area.