Will bankruptcy leave you out on the street?

On Behalf of | Jul 30, 2021 | Bankruptcy

Facing financial problems is something that could affect any Tennessee resident. You may have begun to notice a few issues with your money matters, but at the time, you thought you could keep things under control. However, you may have faced an unexpected event that left your financial affairs in an even more precarious state, such as losing your job or needing costly medical attention.

Still, you may have believed that you could work with your creditors to get the issues addressed quickly and fairly. Unfortunately, the creditors may have been unwilling to negotiate, or even if they were, the negotiations did not help you as much as you had hoped. Now, bankruptcy seems like a better option.

Common concerns

You, like many other individuals considering this debt relief option, may have many valid concerns about bankruptcy. After all, you have likely heard horror stories that bent the truth or that did not have all the information that made bankruptcy seem like a negative course of action. Fortunately, the benefits of using this method may outweigh any temporary downsides that may result.

In particular, you may worry that you will lose all of your assets and find yourself out on the street if you file for bankruptcy. Luckily, that is not the case. Even if you file for Chapter 7 bankruptcy, which involves liquidating, or selling, your assets to repay creditors, you will not lose all of your property. Some exempt assets that will not go through the liquidation process include the following:

  • Your primary vehicle
  • Clothing, household goods and furniture deemed reasonably necessary
  • Tools of your profession, up to a certain value
  • Public benefits, such as Social Security payments or unemployment compensation
  • Jewelry, up to a certain value
  • Household appliances
  • A portion of your home equity

In the event that your house has gone into foreclosure, filing for bankruptcy may be able to stop those proceedings, at least temporarily. Of course, the specific outcomes of your case will depend on your unique circumstances.

Is it right for you?

Fear of losing your assets to bankruptcy is an understandable concern, but the process does not work by leaving you with nothing. It is intended to help address your outstanding debt and to help you get back on stable financial footing. If you believe bankruptcy could help your situation, you may wish to gain additional information that applies to your particular case.

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