Will I lose my property in a Chapter 7 Bankruptcy?

In a chapter seven bankruptcy, there is a high probability that you will lose property. In this type of bankruptcy, assets that you own will be sold, or claimed by your creditors through liens, or similar claims. There is a list of items debtors may keep, so take a careful inventory of your possessions, and make sure you understand what you are entitled to within your state. You may be able to use the federal guidelines if your state’s list is not appropriate in your case. A bankruptcy attorney will have a good idea which guidelines will be best for you.

For some people, however, they may be underwater on a mortgage, or they may own assets that act as a drain on resources, rather than wealth. For these people, a Chapter 7 can unburden them and allow them a fresh start.

This does come with a price. Filing for bankruptcy will affect your credit for seven years or more, depending on your state. You are also required by law to tell any employers or potential creditors (if they ask you) about your bankruptcy. This may affect your ability to apply for a car loan, buy a home, or get a job, so that that into consideration. There are also fees associated with bankruptcy, and plenty of paperwork. Ensure that you have a qualified bankruptcy lawyer to assist you.

Here is a short list of items you will likely have to relinquish in chapter seven bankruptcies.

· Vehicles (you may be allowed one)

· Investments, bonds, CD’s, and other monetary assets

· Collectibles

· Items with intrinsic value, like family heirlooms.

Depending on your case, you may be allowed to keep:

· Tools of your profession, such as computers (if you telecommute)

· Clothing, basic furniture, items needed for everyday living

· Federal benefits from SSDI, VA, or Medicare or Medicaid

· Retirement plans

These lists are non exhaustive, so speak with a local bankruptcy attorney before deciding on the type of bankruptcy you will choose. Each individual case is different.

Bankruptcy can be a difficult and painful process, but with the help of a strong Bankruptcy lawyer in New York, you can sort through the questions surrounding the issue. Each situation will be different, and the amount and type of property you have may determine whether you file a Chapter 7 or a Chapter 13 bankruptcy.

The largest difference in the types of bankruptcies available to individuals is the way debt is handled. In a Chapter 7, burdensome assets are sold off to pay creditors. In a Chapter 13, the debtor may keep all assets, but must create a payment schedule to pay back all debt. A qualified New York Bankruptcy attorney can help you decide which option will best for you. If you have a home or special family heirlooms, a Chapter 7 bankruptcy may not be in your best interests.