People in serious financial trouble have the option of filing for bankruptcy. They could choose to file under Chapter 7 or Chapter 13. Most people, however, are afraid of losing their homes and other properties once they declare bankruptcy.
Fortunately, some ways can help you keep some of your properties.
1. Hire a bankruptcy expert
Almost certainly, you need a lawyer and an asset protection specialist. These two can give reliable advice on how to proceed with your bankruptcy petition. Even if you are well-versed in bankruptcy law, it doesn’t hurt to have expert legal opinion informing your decisions.
2. Stop debt collectors
Debt collectors could no longer force you to pay once you have filed for bankruptcy. Even foreclosure proceedings are stopped. Unfortunately, if it’s certain that you’re going to lose your house anyway, the court can order the foreclosure to continue.
3. Protect your exempt property under Chapter 7
Chapter 7 only allows the sale of non-exempt properties. Generally, the exempted properties include the following:
- Equity in residential home
- Motor vehicle, household items, and clothes as well as other necessities
- Certain retirement accounts such as 401(k)
- Life insurance policy
- Social Security payments
4. Protect all your property under Chapter 13
Under Chapter 13, you keep all your assets if you pay your debts over a certain period of time. Make sure your mortgage payments are also current if you want to keep your home. If you’re having trouble making payments or are threatened by foreclosure, the law allows for a repayment option.
This particular chapter can also help remove second or third mortgages on your house under certain conditions. Take note that you must show your financial ability to follow the repayment plan under Chapter 13.
5. Avoid making any illegal transfers
Use the bankruptcy laws to protect your properties. At the same time, avoid concealing your assets or making any unlawful transfers. If caught, you’re likely to lose most, if not all, of your assets. Also, don’t attempt to transfer any properties without first talking to your lawyer.
The legal advice he or she may provide can save you from a lot of headaches later on.
People fear losing their properties once they file for bankruptcy. Fortunately, with a lawyer’s help, you can save your properties from foreclosures or liquidation. Chapter 7 protects your exempt properties and sells off the rest.
Meanwhile, Chapter 13 lets you keep all your properties, provided you can pay the debt over a period of time. You should also avoid using fraud to conceal or transfer properties covered by the bankruptcy proceedings.