About four years ago, I could tell that things were turning south with my business. Cash flow was tight, and customers simply weren't coming back to shop some more. I realized that if I was going to keep my house, I would need to do something to resolve my finances. Although it was scary, I decided to meet with a bankruptcy attorney. After I explained my situation, he helped me to understand the process and how to tell if it was a good idea or not. When I decided to do it, things started changing for me right away. This blog breaks down bankruptcy in layman's terms, so that you can decide whether or not it is right for you.
If you are declaring chapter 7 bankruptcy, you may already know that you have the potential to lose property if certain conditions are met. What you may not know, however, is the way your property is connected to the pay the administrator of your bankruptcy case earns. Read on to learn more about this seemingly alarming issue, and how it may not be an issue at all for you.
The Trustee
With a federal case filing, you will automatically be assigned an administrator who will oversee your bankruptcy case and preside over some of the proceedings. This person is known as a trustee, and they are often attorneys who have bankruptcy experience, judges or retired attorneys and judges. They don't work voluntarily and their pay is tied to one of the little-known goals of a chapter 7 bankruptcy: liquidation.
Liquidation
When you declare that you are unable to pay your bills by filing a chapter 7, you are also putting your property holdings at risk of seizure. The trustee's job is not just to preside over your case, but to squeeze as much as possible from your assets to help pay the creditors. That is accomplished by taking your property and selling it, and the trustee actually earns a commission on anything that is sold off. Knowing this, you may feel unsettled, but you must understand that there are several reasons why this won't necessarily happen to you.
Holding On To Your Property
The bankruptcy codes offer consumers several ways to keep their property and exemptions are just one of those. With an exemption, you can reduce the value of a given item enough to make it unattractive to the trustee.
For example, if your state allows you to take a $5,000 exemption off of your vehicle it would bring the value of a $20,000 vehicle down to $15,000. If you have a car loan and still owe money, the trustee would have to satisfy that loan in order to make any money on the deal. In all likelihood your car is safe. Most states have personal, vehicle and homestead exceptions available to help you keep your stuff. Some states even allow a doubling of exemptions if you file bankruptcy jointly with your spouse.
A frank talk with a bankruptcy attorney should put your qualms to rest about any property that is vulnerable to seizure and you will know well ahead of time about any seizures.
Share23 April 2018
