Bankruptcy and Assets - The Bills.com Blog

Bills.com Blog > Other Questions > Bankruptcy and Assets

Bankruptcy and Assets

Question: When filing bankrupty can you keep your house and vehicles?

Answer: Generally, you can keep your house and vehicles when filing bankruptcy, but there are several countervailing considerations that prevent an absolute “yes” or “no” answer. There are two basic types of consumer bankruptcy, Chapter 13 and Chapter 7, each with different requirements regarding the debtor’s property. For more information about the types of bankruptcy, you should visitthe Bills.com website at Bankruptcy Article

In most cases, you can safely file Chapter 13 and keep all of your property if you continue making regular payments on your home and vehicles while you are paying your other creditors through the Chapter 13 Plan. Of course, the reasonableness of the debtor’s assets and repayment plan is always an unwritten qualification–a bankruptcy judge is not going to allow a debtor to come into court with five luxury homes and expect his unsecured creditors to wait for payment while he pays five mortgages outside of the bankruptcy plan.

Chapter 7 bankruptcy, also called liquidation bankruptcy, allows a debtor to discharge most unsecured debts. The major limitation to keeping property in a Chapter 7 is the property exemption limits provided by your particular state’s laws. Some states’ exemptions

are generous while others are strict. In fact, some individuals with lots of cash and property move to a different state, usually Texas or Florida, before filing for Chapter 7 protection to take advantage of those states’ generous exemptions. When you have your first consultation with your bankruptcy attorney, you should come in with a set of goals and priorities. Tell the attorney, “I need to file Chapter 7 bankruptcy, but I do not want to file if there’s a chance that I’ll lose my house or car.” At that point, let him figure how to meet your expectations. None of the exemption amounts are absolute, so he will estimate your property values using an allowable standard most favorable to you so that the statutory limits are not a problem.

For consumers considering bankruptcy, the most important piece of advice I can offer is to find an experienced bankruptcy attorney. A good

attorney will be able to fully analyze your circumstances and help you decide if bankruptcy is the right choice for you, and if so which chapter you should file. A good lawyer will also be able to design a plan that will preserve your assets to the greatest extent possible.

When it comes down to making the hard choice, “to file or not to file,” the choice will be yours, but it is extremely rare for a debtor to lose possession and ownership of any property he wants to keep, especially the family home or vehicle.

To learn more about bankruptcy, I encourage you to explore the Bills.com bankruptcy page at http://www.bills.com/bankruptcy/

Hopefully this information will allow you to be better informed when discussing bankruptcy with an attorney.

Good luck,
Bill
www.bills.com

Also, make sure to get a free financial health check-up with Bills IQ!

Submit questions/comments about this post:

Bill has answered all sorts of questions and has been able to provide those in need of financial guidance with helpful and valuable advice and information on their specific financial area of interest. If you need specific guidance on any of the above mentioned financial areas, feel free to Ask Bill your financial questions and get better informed. Also, make sure to get a free financial health check-up with Bills IQ!

Name (required)
Email (required never displayed)
Comments
	Please enter the characters you see in the image above.