Making the choice to file for bankruptcy can be intimidating. It’s not easy to decide to move forward with this process, and one of the things that may be holding you back is a fear of what this can do to your personal property. While you may have to give some things up, it is likely that you can keep many of the things that are important to you.
Bankruptcy is a reasonable and organized way to deal with certain types of debt. If you are unable to manage your credit card debt, medical bills and other types of unsecured debt, you may consider a Chapter 7 filing. While this is technically liquidation bankruptcy, there are exemptions that can allow you to keep most of your stuff while also obtaining a better financial future.
What can you keep?
Chapter 7 requires the liquidation of some personal assets. The proceeds from these sales will go toward paying off some creditors. However, this does not mean you will have to give up many of the things that are important to you. Bankruptcy law provides exemptions that will allow you to keep many of the things you need for daily life. Examples include:
- Necessary clothing
- Reasonably necessary furniture and appliances
- Personal vehicles worth up to a certain amount
- Things you need for work and tools of the trade
- A portion of the equity you have in your home
- Unpaid but earned wages
- Public benefits and damages won through a personal injury claim
Keeping these things can help you keep some semblance of normal life while under bankruptcy protection. However, there are some things that are not exempt, and these things include:
- Expensive musical instruments
- Second home and vehicles
- Family heirlooms
- Cash, bank accounts, investments
- Valuable collections
Liquidating these things goes toward paying off your creditors. Before you file, you may want to speak with an experienced attorney regarding what to expect from this process.
Your financial future
When overwhelmed by debt, there may seem like no way forward for you. Bankruptcy offers you the opportunity to rebuild your financial standing and deal with certain types of balances once and for all. If you believe this could be the right option for you, it may help to seek a complete assessment of your case and explanation of your legal options from an experienced North Carolina bankruptcy attorney.