For many people considering bankruptcy, one of the biggest fears about the process is that you will have to give up your assets and possessions in order to complete the process. However, with Chapter 7 Bankruptcy, you may not have to give up any of your property, depending on your specific situation.
Bankruptcy is meant to be a fresh start for you, and that means that you need to be able to keep the things necessary for you to continue your life and support yourself. These necessities are inaccessible to your creditors, and the bankruptcy court will determine exactly how the exemptions will apply in your case.
Which assets are exempted from liquidation?
The majority of assets which are protected from your creditors are those which you need in order to continue working your way out of debt. These can include:
- Your home equity
- Your car or truck, however, you can only have one
- Your clothes
- Your household goods and appliances
- Jewelry
- Your retirement fund or pension
- Any tools that you use for your job
- Some of the unpaid wages that you earned
- Any benefits that you receive from the government such as social security, unemployment, or welfare payments
Now, for each of these assets, there are limitations on what you can keep. The bankruptcy court will determine whether your asset is of reasonable value, such as your car.
Luxury items may be liquidated to pay your creditors, and you can replace them with a more economical replacement. This applies to other assets such as clothing or jewelry, a reasonably priced asset may be allowed, but highly valuable assets such as designer outfits or jewelry sets may need to be liquidated for your creditors.
This is all a very fact-sensitive assessment, and so the way it will turn out is different in every case and will be unique for you as well if you pursue Chapter 7 Bankruptcy. A bankruptcy attorney experienced in North Carolina bankruptcies will be able to help you understand what you may be able to keep after your bankruptcy.
