One of the concerns that prevents many people from using bankruptcy to discharge crushing debt is the possibility of “losing everything.” Bankruptcy is rarely a painless process, but most proceedings do not take away all of a borrower’s belongings, even Chapter 7.
If you are considering Chapter 7 bankruptcy, it is important to understand the value of strong planning and legal guidance in Shreveport throughout the process. With a clear grasp on the complex laws that regulate bankruptcy, you can ensure that your rights remain secure from the day that you file until you complete your discharge, allowing you to focus on rebuilding your financial life.
What is exempt property?
In general terms, Chapter 7 bankruptcy requires borrowers to forfeit some of their personal property and accept restrictions against borrowing more for a certain amount of time. However, the law also offers protections to the borrower so that they retain important property that helps them recover financially.
Although you may have to forfeit a significant portion of your property, depending on how much property you own and how much debt you hope to discharge, forfeiting everything you own is very unlikely.
The law lays out several categories of property that you may exempt during bankruptcy, up to a certain value. These values change just like other regulations change, often without much warning or publicity. It is always wise to carefully research how exemptions apply to your personal property before assuming that you must forfeit or may exempt any specific asset.
Exempt property may include:
- Some or all equity you own in your home
- Some unpaid wages you are already owed
- Public assistance, social security and other public benefits already accumulated
- Compensation from a personal injury claim
- Professional tools that help you earn income
- Motor vehicles under a certain value
- Jewelry under a certain value
- Household items and appliances
These categories represent property that the law allows you to prioritize and keep, at least in part.
Protect yourself now for a brighter future
The sooner that you begin your bankruptcy, the sooner that you may enjoy the benefits of making the necessary sacrifices. Unfortunately, many borrowers are so burdened by their debt that they do not see the value in carefully planning and executing their bankruptcy procedure in Louisiana.
The next chapter of your personal and financial life could be right around the corner. Make sure to use all the resources that you have available to build a strong bankruptcy strategy, keeping your rights secure and creating a future where you have the tools to rebuild and succeed.