In a recent episode of a popular television show, a wealthy couple has to file for bankruptcy and faces the loss of their home, car and even the wife’s wedding ring. The question comes up for parties considering personal bankruptcy protection for debt relief how their property will be handled during the bankruptcy process.
There are two primary types of personal bankruptcy including Chapter 7 bankruptcy and Chapter 13 bankruptcy. Chapter 7 personal bankruptcy protection is more popular than Chapter 13 bankruptcy protection for several reasons but that does not mean it is always the best option. Chapter 13 bankruptcy is a reorganization type bankruptcy that is an option for filing parties with a reliable source of income to consider. Chapter 7 bankruptcy is typically quicker and is usually resolved in approximately 4 months and leaves the filing party with the discharge of certain debts they will not have to repay.
As part of the Chapter 7 bankruptcy process, it is important for the filing party to accurately list all of their assets. In a Chapter 7 bankruptcy filing, assets are liquidated to repay creditors. Certain property, subject to certain limits, may be exempted, or protected, from the liquidation process. Certain property, including personal property and jewelry, may be protected. Though certain property is exempted during the Chapter 7 bankruptcy process, the exemption rules can vary by state so it is important for the filing party to be familiar with what the rules are in their state.
In addition, there are certain categories of property that are treated in different ways so it is also useful for filing parties to be familiar with those categories. Personal bankruptcy protection is a resource for struggling consumers to consider when they are facing overwhelming debt they need help with.