Can I Keep My Assets After Filing Bankruptcy?
Bankruptcy exemptions help keep assets, such as homes, cars, money in financial accounts, and other possessions.
Filing for bankruptcy can help to eliminate certain debts while restructuring payments on others in a way you can better afford. Contrary to a common myth, bankruptcy does not require surrendering all of your property and assets in exchange. Exemptions allowed in bankruptcy proceedings help to protect many of your most valuable possessions.
Will I Need to Surrender My Assets to Satisfy My Debts?
Chapter 7 bankruptcy is known as a liquidation. It eliminates certain unsecured debts, such as credit card balances, personal loans, and medical bills. Depending on the situation, it may involve surrendering certain items, such as cars, boats, or other property on which you are behind in payments or underwater in terms of the amount owed.
If you want to keep these items, Chapter 13 bankruptcy may be a better option. It allows you to keep certain types of property, restructuring payments by spreading them out and reducing penalties or interest, thereby reducing the amount you pay.
When you file either type of bankruptcy through the Philadelphia district of the U.S. Bankruptcy Court, you will be required to disclose all assets you possess. This is the part of filing for bankruptcy that makes some people nervous. They have visions of the court seizing certain items or the funds in their bank accounts in order to satisfy outstanding debts. Nothing could be further from the truth. The main goal of bankruptcy is to help you regain your financial security and protect the assets you currently possess.
Exemptions in Philadelphia Bankruptcy Proceedings
Regardless of which type of bankruptcy you file, there is a long list of personal exemptions you are permitted. These are included on Schedule C in your bankruptcy petition. These are assets which are essentially immune from bankruptcy or any creditor claims. Common exemptions in Philadelphia bankruptcy proceedings include:
- Homestead exemption: This exempts nearly $24,000 of the equity built in your home.
- Vehicle exemptions: You can claim nearly $4,000 of the equity in your vehicle as exempt.
- Household items: You can claim up to $12,625 of household goods such as furniture, kitchen equipment, or other property as exempt from your bankruptcy petition.
- Tools of your trade: You can claim close to $2,500 worth of tools, books, computers, or other items as exempt.
- Other property: There are allowances for jewelry, clothing, and other personal items. You can also apply nearly $12,000 of any unused exemptions to other property you possess.
- Pensions: Tax-exempt retirement accounts and pensions you receive through your job may also be exempt from bankruptcy proceedings.
- Insurance, business property, and other benefits: All have exemptions to protect your interest in them under state and federal bankruptcy laws.
Schedule a Free Evaluation with Philadelphia Bankruptcy Lawyer George Tadross
At Tadross Law, we help you eliminate debts through bankruptcy proceedings while protecting your existing assets. To request a free evaluation of your case, call (267) 382-4466 or contact our Philadelphia bankruptcy lawyer online today.