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When debt becomes overwhelming and you can no longer handle your debt, you may consider filing for bankruptcy. This is a serious decision that could affect your finances for the next several years; however, it can also help you reorganize your debt and relieve the stress that often comes with financial trouble. Before you choose to file, there are a few questions you may want to ask your bankruptcy attorney about how this action affects your personal property.
- Will I Lose All My Possessions?
The type of bankruptcy you declare can affect whether you must give up any personal assets you own, such as vehicles and property. If you choose to declare Chapter 13 bankruptcy, you can propose a repayment plan to your creditors and keep all your valuable assets. If you choose Chapter 7 filing, you do not have to repay any debt but will have to surrender this property. Your lawyer can help you decide which avenue is best suited for your situation.
- Can I Transfer Property Titles?
Transferring property to another individual before you file for bankruptcy may be seen as fraud by the courts and your right to file bankruptcy could be voided. For example, if you sign over a vehicle to a friend or family member to protect it from Chapter 7 bankruptcy and do not claim it on your list of assets, this would likely be considered bankruptcy fraud, and there may be serious consequences.
- How Do I Avoid the Risk of Fraud?
Being as honest as possible with your bankruptcy trustee can help you avoid unintentional fraudulent actions. First, make a list of all your assets and turn it over to your trustee, who will help you with overseeing the process and let you know if any of your personal property is exempt from a Chapter 7 filing. If you decide to sell something before the filing, you may want to disclose this to your trustee to avoid falling under suspicion of fraud.
- Do I Qualify for Any Exemptions?
While some exemptions do exist for Chapter 7 bankruptcy, they can depend on a variety of factors including which state you live in and the value of a certain asset. For example, if you own a car worth $5,000 and the equity on that vehicle is more than its total value, you may be allowed to keep it. Your trustee can help you understand individual exemptions that apply to your situation.
The decision to declare bankruptcy is never an easy one, but you do not have to face the questions it may cause alone. Reach out to an attorney, like a bankruptcy lawyer in Memphis, TN, today for more information.
Thank you to the experts at Darrell Castle & Associates for their input into bankruptcy law.