Securing Your Assets When Filing for Bankruptcy
Bankruptcy is a valuable legal tool that can help you get out from under the burden of rising debt. Some have a stereotypical notion of bankruptcy in their minds that includes only very poor people who are living paycheck to paycheck and who don’t have anything of value. But the truth is that many people have valuable assets like homes, cars, and more when they consider bankruptcy – and they are worried about losing it all when they unload their debt.
Fortunately, there are ways that you can protect your assets when filing for bankruptcy in Glendale. Here are some options you should discuss with and experienced Phoenix bankruptcy attorney:
If you file for Chapter 7 bankruptcy in Mesa, you will get the maximum debt relief. All of your unsecured credit card debt can be discharged under Chapter 7 bankruptcy. However, this form of bankruptcy also allows the bankruptcy court to seize your assets and sell them to pay your creditors before those debts are discharged.
The good news is that there are exceptions. Chapter 7 bankruptcy allows you to keep certain assets, so long as they fall under certain amounts. The exemption amount varies by state, and it can vary at the state and federal level. So long as your asset is not worth than the exemption, you can keep it. For example, the exemption for a homestead in Arizona is $150,000. Your home may be worth more than that, but if you still owe a lot of money, it won’t be worth that much to you. If the equity you own in the home is under $150,000, you will be able to keep it after filing for Chapter 7 bankruptcy in Phoenix.
Bankruptcy law outlines exemptions for other types of property, including household furnishings, vehicles, and even insurance accounts. The value of your property will be assessed to determine whether it can be exempt under these rules.
It is important to understand how value is assessed. Value is determined based on what an item can currently sell for – not what you paid for it. For example, your husband may have paid zero dollars to give you his grandmother’s wedding ring, but if that ring can fetch a price on the secondary market, it may not be exempt from your bankruptcy proceedings. You need to talk through your assets with your Avondale bankruptcy attorney to get an idea for how the bankruptcy court will value them. Value can be subjective, so you may be able to put up a fight for certain assets.
File for Chapter 13 Bankruptcy
If you have assets that won’t fall under the exemptions and you want to keep said assets, you may need to file for Chapter 13 bankruptcy in Mesa instead. Chapter 13 bankruptcy allows you to keep your assets while putting you on a debt restructuring plan with one monthly payment that you are determined to be able to afford. The payment plan lasts for three to five years, and any debt remaining at the end of the term may be discharged.
You’ll need to talk with a bankruptcy attorney serving Gilbert to understand how filing for bankruptcy may impact your assets and what your options may be. Every case is unique, so there is no one-size-fits-all answer for how your debts and your assets will be handled. Your bankruptcy attorney in Arizona will review all your financial circumstances and will offer detailed guidance about how bankruptcy may help you. Your attorney will help you determine the best strategy to get the maximum debt relief while also losing the least amount of assets (preferably none).
Call My AZ Lawyers if you are in Arizona and are thinking of filing for bankruptcy. A bankruptcy attorney from our team will review your finances and help you understand your options under bankruptcy law. Our attorneys are experienced and committed to helping you get the maximum debt relief under bankruptcy law. They will answer all your questions and help you understand your full rights and responsibilities. We serve clients throughout the Phoenix area, including Mesa, Tucson, and Glendale. Call us today to schedule a time to meet with a bankruptcy lawyer. You’ll soon learn why we are the top bankruptcy law office in the area.
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