One of the biggest fears that North Carolina residents have regarding bankruptcy is the thought of losing personal property. There are a lot of misconceptions about consumer bankruptcy, and one of the main concerns is how non-financial assets will be dealt with by the courts. In reality, it is quite possible you will be able to keep most of the things that are important to you.
Chapter 7, the most popular option for consumer bankruptcy, is liquidation bankruptcy. This process requires the liquidation of certain assets in order to pay off debts. If you file for Chapter 7, it is true you may have to surrender some of your property, but it does not necessarily mean you will have to give up everything. There are certain exemptions that may be available to you.
What will I get to keep?
Even when filing for Chapter 7 bankruptcy, it is possible to keep most of your property. You could qualify for certain exemptions to the liquidation of your property, including the following types of personal possessions:
- Things needed for everyday life, such as your furniture and your appliances
- Tools of the trade you may need for work
- Your vehicles worth up to a certain dollar value
- Damages you won in a personal injury suit
- Jewelry and reasonably necessary clothing
- Your pension and a portion of the equity in your home
- Wages you earned but have not yet received
- Your public benefits
These exemptions can allow you to keep certain things that you hold dear, but it can also allow you to keep what you need for daily life and to get back on your feet. However, exemptions are not available for everything. Some of the things that may be subject to liquidation during Chapter 7 include the following:
- Valuable collections and some family heirlooms
- Musical instruments
- Second vehicles and second homes
- Some cash, bank accounts and other savings
Before you file for bankruptcy, it can be beneficial to seek a full understanding of exempt and non-exempt property before you move forward.
Is Chapter 7 bankruptcy the right choice for you?
The decision to file for Chapter 7 bankruptcy is not an easy one to make. However, this could offer you the opportunity to confront your debt once and for all, securing a better financial future.
If you have concerns about losing your property or need to know what to expect from the bankruptcy process, it can be helpful to seek a complete explanation of your rights and options.