Most people are afraid to file bankruptcy because they do not understand the process. There are a lot of myths out there about what you can and cannot do during bankruptcy, and unless these myths are debunked it can be difficult to make a decision. One of the most common misconceptions about filing for bankruptcy has to do with your property. Many people are led to believe they can keep their stuff without having to pay for it if they file bankruptcy, but that is not the case. So if you are thinking about turning to bankruptcy for financial relief, a quick lesson in what to expect is in order.
It is true that you are able to hang on to your property if you file bankruptcy, but in order to do so you have to maintain payments. In a bankruptcy, here is what you can expect to happen to your assets:
- If you decide to keep your house, or your car, you can do so by continuing to make the payments. This is generally done by signing a reaffirmation agreement, which is like a new contract for repayment of the debt. When you sign a reaffirmation agreement you agree to be legally and financially bound to the bank until the loan is repaid in full. If you fail to pay, the lender can repossess the collateral.
- Your personal property is exempt from bankruptcy, up to certain amounts. This means the value of things like your furniture and jewelry are protected up to a certain dollar figure. A more thorough explanation is given when you sit down with your attorney to prepare your case, so no surprises will be forthcoming.
- Investment and retirement accounts are typically safe in a bankruptcy, as long as certain parameters are met. Much like exempt property, the specifics depend upon the facts unique to your case and will be discussed prior to filing a case.
The bottom line is that you are able to hang on to your assets if you file a bankruptcy case, but every case is treated individually according to the distinct facts of the case. Our job is to go over all of the information about your case, and give you an explanation of how the law applies in your situation. Once you have heard the answers, you are in a good position to decide what is best for you.
For help with your questions about how your assets are handled in a bankruptcy, contact us at www.DsouzaLegalGroup.com. We will help by coming up with solutions that help get you back on your feet.