How To File Bankruptcy

Bankruptcy serves as a real option for those who find themselves unable to pay off their debts. However, one of the main concerns that people have when it comes to bankruptcy is what will happen to their bankruptcy assets.

Fortunately, there are two main things you will want to think about before filings. They are exemptions and unqualified debts. Exemptions are bankruptcy assets that you can keep despite filing bankruptcy. There are both federal and state exemptions.

You should choose the exemptions that work best for your bankruptcy assets situation. In most cases your home and personal belongings are protected, however, anything considered excessive in value is often not protected.

The important rule is that you should not sell the exempt bankruptcy assets, which are those that would be protected if you ended up filing Chapter 7 bankruptcy.

Your state law will determine the specifics of your bankruptcy assets, but in most cases your primary home will be protected up to a certain value, along with pension plans, a reasonably priced vehicle, and your basic furniture.

Second choice is debts. Some debts are not able to be claimed and cleared through bankruptcy. Things like child support and student loans are examples of debt that can not be cleared as bankruptcy assets through filing bankruptcy. You should really consider an alternative to bankruptcy if you have mostly unqualified debts that can’t be consider as bankruptcy assets.

In chapter 13 bankruptcy, your bankruptcy assets are eliminated but your debts are not done away with. Instead, you work out a payment plan in which you will pay part or all of your debt which usually within 3 to 5 years. The advantage is that you don’t have to give up your bankruptcy assets to help pay your creditors.

This means that if you are in a position where you want to wipe clear you debt immediately, you will be required to obtain chapter seven bankruptcy and, as such, bankruptcy assets will be forfeited in order to see your contribution.

In many cases, no bankruptcy assets are considered for forfeit, either because the person filing has none or because those they have are not substantial enough in bankruptcy assets value to make a worthwhile contribution.

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