Brigham City Bankruptcy Attorney. Visit http://www.BankruptcyLawyersBrighamCityUtah.org/ or call us at (435) 565-4857 for more information about filing bankruptcy in Brigham City, UT.
In this video, Corey discusses what are the assets that you can keep when you file a bankruptcy.
For more bankruptcy help, visit http://www.BankruptcyLawyersBrighamCityUtah.org/
Brigham City Bankruptcy Questions and Answers
What assets can I keep?
If you're wondering what assets you're going to be able to keep in a Chapter 7 bankruptcy or even a Chapter 13 I'm going to tell you the long and the short answer. The short answer is I don't know, it depends. The long answer is there's a whole set of rules built into the bankruptcy code of what you can and can't keep.
Let me give you the basics because these are the ones people are most concerned about: cars, houses, and basic necessities.
I think it's pretty common sense that if you have an original Mona Lisa or signed copy of the Declaration of Independence then that's going to be a problem because you have a very valuable asset and you're saying "hey I don't have anything of value, I'm not able to pay my debts". Clearly it wouldn't be true. But most people don't have those types of things lying around and what they're most concerned about is "am I going to lose my car? Am I going to lose my house?" Sometimes people say "oh I think I'm going to lose everything, they're going to come in and confiscate my clothes".
Let me put that fear to rest for you. First of all there are things built into the law called "exemptions" and they're just basically a way for all of us to say even if we're going through bankruptcy, even if we need that protection that built into the law and the constitution, it doesn't really make sense for us to just pull the rug out from under people and leave them destitute with nothing so we give them an allowance -- so to speak -- for the basics.
Nobody takes your clothes, nobody takes your bed, nobody takes your furniture. You're allowed to have the stuff that you have within reason. If you have a normal television they're not going to come in and take your television. If you have a 120 inch plasma hanging on the wall you might have a problem.
Cars. You're allowed a certain amount of dollar value in equity. That's important. You want to pay attention to the part where I said equity because what they don't pay attention to is if that equity is eaten up by debt. If you have a $20,000 car and you owe $20,000 it doesn't matter. They don't want it. They're not going to come in and take it. If you have a $20,000 car and no debt then the exemption you're given for a car in your particular area is not going to be enough most likely to cover that entire amount of equity. So you want to speak to your lawyer about how to approach that situation because there are ways to make absolutely sure that you don't lose that vehicle even if it's not fully exempted.
And then of course your house. That's the big big big one that everybody wants to know about. Well there's also an exemption built in in every state for houses. What it's called is the homestead exemption and it varies from state to state. Now you have states like Florida --for example-- where it's unlimited. And you have guys like O.J. --who filed bankruptcy-- and they were able to keep these big million dollar houses and protect them because in Florida it's an unlimited homestead. You have states like here in Utah where the homestead is $20,000 per spouse. So you can protect, if you're married, up to $40,000 of equity in a home.
Now let's go through a worst case scenario. Let's say you have $80,000 worth of equity in a home so you're worried that you might lose your house because you have this equity built up. But at the same time circumstances have changed and you're having trouble paying your bills -- not a problem. That's why we invented Chapter 13s. It allows you to protect that equity and say "hey I understand there's equity there so what we want to do is make some kind of arrangement where we can pay our bills on time and make sure everybody is taken care of but make sure that we don't lose the equity in our house".
So if you have that issue --if you're worried about equity-- first call a lawyer who does this for a living, who is a bankruptcy expert. Talk to them about it and just share your concern because here's the thing, this is where most people run into problems, they think that something is going to go wrong so then in their mind it already did. Then what ends up happening is they choose to do nothing, they don't take action, they sit and wait, they bury their head in the sand and then the thing they feared the most come true because they didn't take action. The house ends up in foreclosure or the car gets repossessed or they start getting slammed with judgments or garnishments and then it really is a worst case scenario.
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