Evidently bankruptcy can be very depressing as it you stand a chance of losing all you have. It affects your credit and your spending. Your pride could be hurt but filing for bankruptcy is much better than being silent about it. You don’t necessarily lose all you have when you file for bankruptcy, tha is why it’s advised or as the law permits, you meet a bankruptcy counselor. Bankruptcy is in two forms. Chapter 7 and chapter 13.
This is called liquidation or straight bankruptcy. In this type of bankruptcy, you assets are given to a trustee which is given a cash value of your assets and divides it amongst your debtors.
This kind of bankruptcy is called a no-asset bankruptcy, but according to some state laws, they are exemptions. Florida for example is called a “debtor’s paradise”.
Unlimited equity cash in your home. For instance, if your home cost $1 million dollars and you just have $100,000 remaining on the mortgage. The remaining $900,000 remains legally yours as far as you can prove that it’s your main residence.
Any car with a value less than $6,600. You are allowed to keep even two cars if the combined value is less than $6,600. You can even lease one out to help raise money to pay your debts.
Your passport. You are allowed to keep your passport, but however, you need a signature from your trustee before you embark on a journey overseas.
This kind of bankruptcy is called a “reorganization”. This kind of bankruptcy is an interest – free debt repayment model. You are allowed to keep your assets based on how much you earn. Things like your home regardless of its value. For more information you can take help of chapter 13 bankruptcy lawyer dallas .
Your stock – in this kind of bankruptcy, you are allowed to keep your stocks. Personal belongings – you are also allowed to keep personal belongings like jewelry, clothing, etc with a combined value of $1000 or less.
Household Goods and Furnishings
Federal and state laws allow you to keep household goods and furniture. The exemption is about $11,525 with no item having a value of $550. This is because these items do not have high resale value and trustees don’t bother selling them to repay debtors.
Your retirement funds are exempted too. Exemption includes pension, profit and stock bonus plans, your Individual Retirement Accounts (IRAs) is also exempted.
Evidently, declaring bankruptcy is not a terrible thing or the end of the tunnel. There is life after bankruptcy. Declaring bankruptcy gives you an opportunity to stand up on your feet when you have money troubles. All you need to do is comply with Federal and state laws, and you will find a good counselor who can help you through. The least length of time to keep the bankruptcy status is three years. This is done to be sure you are up on your feet.