When you start looking into bankruptcy, you will probably hear a lot about your “assets.” According to the law, this refers to any property you own or have an interest in.
Although the United States Constitution grants all consumers the right to relieve debts through one of two personal bankruptcy chapters, many people hesitate because of common myths surrounding assets. In general, filing for bankruptcy does not mean you have to give up everything you own. At the end of the day, how much you may lose comes down to the specifics of your case. Consider these four questions.
1. When Can I Keep My Assets?
To qualify for Chapter 7, debtors must earn below a certain income level set according to state and federal poverty thresholds. In addition, the law states that individuals may only own up to a certain amount of possessions. For many people, their most valuable assets include things such as their homes, cars and retirement accounts. To protect enough property to allow for reasonable living conditions, the law permits several exemptions. Usually, you can keep anything that fits into exemption limits.
With Chapter 13 bankruptcy, you have the option of keeping all of your assets, regardless of value. The reason for this is because you will enter into a repayment plan that will prevent creditors from needing to sell what you own.
2. When Do I Have To Give Up My Assets?
Sometimes, individuals end up having to liquidate assets when they file for Chapter 7. When this happens, it is because they own too much value beyond the scope of what federal or state exemptions allow.
3. What if I Share Assets With Someone Else?
If you jointly own property with someone else, your bankruptcy trustee may consider the asset differently, depending on your state laws and case details. For example, in many bankruptcies, the law only considers an individual’s interest in shared assets rather than the entire worth of the property.
4. Can I Sell or Transfer Assets Before Bankruptcy?
If you are thinking about selling or transferring an asset prior to filing for bankruptcy, stop! Even if you have good intentions, the law can seriously frown upon on this.
When it comes to filing for bankruptcy, one of people’s biggest fears is losing their assets, but depending on your situation, there may not even be a reason to worry. If giving up property is a concern of yours, contact an experienced bankruptcy lawyer today who can help you navigate the specifics of your case.