Figuring out how much of your assets will be seized in bankruptcy depends on the type of bankruptcy you file and the value of your belongings.
Chapter 7 bankruptcy implies that you do not have enough disposable income to make debt payments would like to have the debt eliminated in order to get a fresh start. As part of the process, you may have some of your assets seized and sold to pay off a portion of your debt to existing creditors.
However, other assets such as cash, your home and your car may be exempt from the bankruptcy depending how much they are worth. Exemptions vary from state to state, but generally speaking, any assets with equity lower than the exemption amount are safe from seizure. Retirement accounts such as 401Ks and pensions are also exempt as are IRA’s up to a certain limit.
Some people filing for Chapter 7 may keep their cars by filing a reaffirmation agreement confirming their intention to honor the loan agreement even though they are filing for bankruptcy. However, if the car payments become delinquent after entering into the agreement, the lender may seize the car.
If you have questions regarding what bankruptcy protection can offer you, contact the Law Offices of Charles E. Covey for help. Charles can provide you with all the information you will need to decide if bankruptcy is right for you.