Unless you’re one of the small group of people that inherited their entire wealth, you probably worked hard for everything that you now own. From houses to cars, clothing to outdoor buildings, each thing in your possession represents something that you have obtained. But when bills pile up and become too much to handle, many individuals are sickened by the thought of losing the possessions they worked so hard to earn. Thankfully, there is a tool in your financial toolbox that will allow you to hold on to your most valuable possessions – Bankruptcy. There are several steps that you can take to protect your assets and keep what belongs to you through filing for bankruptcy.
How Can Philadelphians Use Exemptions in Bankruptcy
When you file for bankruptcy, you may expect that the process will involve selling some of your possessions to pay back the debt that you owe. Before you envision yourself homeless and possessionless, it’s essential you learn about exemptions. Exemptions help to protect certain properties such as your home, your vehicle, or a piece of land that you may own. While the amount of assets that you can exempt varies from case to case, you won’t lose everything in the process of getting out of debt.
What are Chapter 7 Bankruptcy Exemptions?
A Chapter 7 bankruptcy works to do away with your debt entirely, which means that you will need to sell properties to help cover the debt. Depending on your location, you will be given a certain exemption amount for your house, vehicle, and possessions. Whether you get to keep the property will depend on how much you owe on it, the value of the item, and how much you get for an exemption on it. Your trustee is not going to want to sell an item if its value is little more than the exemption. So you can expect to keep items that are less or even somewhat more than the exemption amount. Unless you have high debt on each of your items, you will likely get to keep many of them.
What are Chapter 13 Bankruptcy Exemptions?
A Chapter 13 does not work to do away with debt entirely but to instead refinance your payments so that they are more manageable. Priority and secured debts will need to be paid in full over a 3-5 year period, while non-priority unsecured debts can be paid in part. A local bankruptcy attorney near you will be able to help you determine the types of debts you have. To help protect creditors, a Chapter 13 bankruptcy makes you prove that you can pay a certain amount on your unsecured debt each month. While you won’t have to sell any of your possessions, you will need to prove that you can make the payments so that you can get your bankruptcy confirmed. In some cases, you may choose to voluntarily sell some of your possessions to lower your debt load and start the confirmation process faster.
Understanding bankruptcies can be a complicated process. It is important to talk to a bankruptcy attorney near you who can help you understand the plan best for you and show you how the benefits of bankruptcy will work out in your unique case. At our offices, we are proud to help individuals and families understand how bankruptcy will affect them and choose the best plan to move forward. With over 500 5-star reviews and a Super Lawyer ranking, you can trust Sadek and Cooper to get you the most out of your bankruptcy.
Filing for bankruptcy can seem like a frightening prospect, but you can rest assured that by taking the right exemptions and having a good attorney on your side you won’t lose everything. Instead, you can look forward to a debt-free future that allows you to flourish while still keeping your most valuable assets.