If you are overwhelmed by your debts, then you may need to consider your options to get rid of them and regain control of your financial life. Eventually, you may find that one of the most efficient and effective alternatives to becoming debt-free is bankruptcy. Through this legal process, most of your debts may be discharged and you will be able to enjoy a fresh financial start.
However, when talking about bankruptcy, a few questions will probably come to mind: What will happen to my assets? Will I lose some of my most prized possessions? The answer varies depending on the assets you own and the type of bankruptcy you file. Some of your assets will be safe during the process, but not all of them. Nevertheless, bankruptcy provides options that can help you erase your debts without having to lose anything in the process. Here you will find everything you need to know about non-exempt assets and what your options are for retaining them.
At the beginning of your bankruptcy process, you will have the opportunity to “exempt” some of your most important assets from the process. Exempt assets are not affected by the bankruptcy process and you can keep them even after you obtain a debt discharge. Some common exemptions are a modest vehicle, your home and the furniture inside it, your clothing, tools of the trade, etc.
However, to protect your assets you must use exemptions wisely. The process can be complex, but it may be a lot easier if you work with a bankruptcy attorney in Anaheim California, such as KT Bankruptcy Lawyer. The advice of an experienced attorney can help you get the fresh financial start you need, without losing your most precious assets.
What are non-exempt assets?
Non-exempt assets are those that are not protected during the bankruptcy process. This type of property is usually not necessary for your home, your job, or your daily life, so it is deemed to be non-essential. Therefore, this type of property may be sold by the court-appointed bankruptcy trustee to raise funds to pay your creditors.
Examples of non-exempt property
Some common assets that are not protected during the bankruptcy process are the following:
- Excessively expensive musical instruments, unless the debtor is a professional musician.
- Collections of coins, stamps, antiques, or any other valuable items.
- Family heirlooms.
- Valuable works of art.
- Excessively expensive clothing.
- Investments in bonds, cash, stock market shares, options, hedge funds, bank accounts, etc.
- If you own a luxury car, you may have to sell it and use some of the money from the sale to buy a modest one. Car exemptions vary from state to state. If you own a secondary car, it won’t be protected either.
- If you own a secondary home, such as a vacation home by the beach, you won’t be able to keep it either.
Chapter 7 Bankruptcy and Non-exempt assets
Chapter 7 bankruptcy involves the “liquidation” of all of the debtor’s non-exempt assets. Therefore, in this type of bankruptcy, a bankruptcy trustee will be responsible for selling your non-exempt property and distributing the proceeds of the sale to your creditors.
What is a “no-asset” bankruptcy case?
Now, you may be able to keep all of your assets during Chapter 7 bankruptcy. In fact, it is much more common than you might imagine.
In most cases, bankruptcy exemptions cover all of the debtor’s possessions. This means that all of your assets will be protected during bankruptcy, and you won’t have to sell anything to pay your debts.
Chapter 13 can help you keep your assets
However, if you own non-exempt property, Chapter 13 may be your best option to keep it and get rid of your debts at the same time. Your local bankruptcy attorney will help you develop a repayment plan to pay off your debts over some time. If you stick to the repayment plan, you will be able to keep your assets at the end of your bankruptcy process.
If you want to know more about Chapter 13 bankruptcy, or other alternatives to become debt-free, visit http://www.legalfacts.org Here you will find information on all kinds of legal topics. Plus, you will be able to contact bankruptcy attorneys near you who are ready to help you with whatever you need. Consultations are free, you have nothing to lose.
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