What Happens During Chapter 7 Bankruptcy?
The process of filing for bankruptcy can be overwhelming especially if there’s a chance that you could lose all of your assets. If you are in a position where a court may force you to potentially sell some of your assets in order to pay off debts, understanding the type of bankruptcy that you qualify for and what happens during a chapter 7 bankruptcy can be important. Here are some of the ways the Chapter 7 bankruptcy can affect your life overall:
It may force you to sell some of your assets. Certain assets will not be viewed as nonexempt chapter 7 bankruptcy and these can include:
- Extra property apart from your primary residence
- Expensive musical instruments
- Clothing of a certain value
- Newer model vehicles with equity
- Valuable artwork
- and more
A lawyer can often help to protect some of your assets such as a home or vehicle but it may be likely that you will be unable to keep the vehicle that you currently own depending on your debt and the value of the vehicle that you currently own.
The value of assets in chapter 7 bankruptcy will pay off some or all of your debt to creditors. If you are thinking about the process of filing for Chapter 7 you may want to think about some of the items you would be willing to liquidate first. The property and assets that you would be willing to sell could be forced for sale if you are unable to pay your debts. Choosing to willingly sell some of these items ahead of time can help you to have more control over what you will sell and what you’ll be allowed to keep in the bankruptcy process.
If you’d like to learn more about Chapter 7 bankruptcy and settlement using this type of bankruptcy, contact our tax experts today.