One of the most common concerns consumers have regarding bankruptcy is how this decision will affect their daily lives. Even the most financially overwhelmed consumers who would benefit from bankruptcy may be hesitant to take this step because they assume they could lose their personal property. You may be considering this step as a way to reclaim your financial stability, but you do not want to lose the things that are important to you.
Thankfully, filing for bankruptcy protection does not mean that you will lose your property and be left destitute. Bankruptcy laws provide property exemptions for applicants, which means you may be able to keep many of the things that are most important to you. Before you make any decisions that could impact your future, you may benefit from an explanation of the benefits and potential drawbacks of this decision.
Chapter 7 and your personal assets
For many in Tennessee who are considering bankruptcy, Chapter 7 is an attractive choice. It only takes a few months to complete, and it is an ideal option for individuals who have a significant amount of unsecured debt. However, this is also liquidation bankruptcy, which means that some of your property may be part of liquidation and repayment of debts. However, exemptions for the following mean that you can retain some of the things that are critical for you and your family:
- Necessary clothing, within reason
- Reasonably necessary furnishings and appliances in your home
- Jewelry, worth up to a certain value
- Tools of the trade and things you need for work
- A portion of the equity in your home
- Proceeds from a personal injury claim
- Unpaid but earned wages
- Public benefits you are currently receiving
Examples of non-exempt property include second vehicles or homes, valuable collections, musical instruments, cash and investments.
When is bankruptcy the best choice?
Bankruptcy is not the best option for every situation, but it could be the ideal way for you to put the pieces back together and move forward after accumulating a significant amount of debt. If you are considering Chapter 7 or another option, you may benefit from seeking an explanation of the specific legal options that are available to you and which choices will be most likely to secure your financial interests for years to come.