Bankruptcy is an extremely complex and lengthy process; that alone makes it a tough nut to crack for most Americans. Add crushing, overwhelming debt, gnawing anxiety, and fear into that mixture and now you have a recipe for disaster; when playing with personal and family assets everybody is liable to get scared about the future. However, there are a few glaring misconceptions about bankruptcy that do not do due diligence, the foremost among these is the notion that people lose everything they have in the bankruptcy process. False. Bankruptcy was designed to help American citizens either give up most of their nonessential assets to have a new start or to help them restructure their debts into a payment over 3 to 5 years, these descriptions fit chapter 7 and 13 bankruptcies! In both cases, there is something known as an exemption; these allow creditors to retain certain assets through the bankruptcy process! Wondering what assets can be taken during your bankruptcy process? We put together a small guide on the different types of bankruptcies and their exemptions!
Chapter 13 Exemptions
With Chapter 13 bankruptcy a creditors agrees to consolidate their debt into a single payment that is then repaid in a 3 to 5 year period. This bankruptcy requires you to have a reliable source of income, like a career, that can be guaranteed to be used as a source of income to pay down the debts. This bankruptcy chapter usually helps a creditor to retain most of their assets if the repayment plan is followed diligently and payments are not missed. At the end of this bankruptcy, a creditor can be free of their debts without losing much in the way of personal assets either!
Chapter 7 Exemptions
The goal of a chapter 7 bankruptcies is to provide the creditor with a fresh start; they may not have excess, unneeded assets but they will have a car (a way to work), and a home (a place to reside in). Examples of assets that will be used to pay off debt are things like a second car, motor vehicles used for recreational purposes (motorcycles not used for regular transport, ATVs, off-roading vehicles), generally recreational luxurious will be the first on the chopping block to be sold for debt repayment.
In conclusion, the myths about what assets can be taken during your bankruptcy case are ludicrous and far-fetched. Most Floridians are surprised to find out they keep a lot more when filing for bankruptcy (especially Chapter 13), but even chapter 7 bankruptcies can leave you with more assets than you thought you’d have thanks to the exemptions provided by the law. When planning a bankruptcy, it is vital that you work with experienced bankruptcy lawyers with thousands of hours experience handling all sorts of bankruptcy cases. From the smallest of families, to large restaurant groups, Bruner Wright P.A is the law firm is the first firm to call if bankruptcy is an issue. Bruner Wright P.A. has handled bankruptcy cases across the state of Florida; there is no situation or type of bankruptcy that we have not handled. We believe that the only good law firm is a responsive, communicative firm. Bankruptcy is confusing and complex, it is imperative that you have professionals available anytime for any questions, contact us today!