| What property can I keep after I file bankruptcy?
In a chapter 7 case, you can keep all the property which
is exempt from the claims of creditors. In determining whether
property is exempt, you must keep a few things in mind. The
value of property is not the amount you paid for it, but
what it is worth now. Generally the trustee is interested
in the resale value of your property so for most personal
effects this is the garage sale value of your property.
You also only need to look at your equity in property. This
means that you count your exemptions against the full value
minus any money that you owe on mortgages or liens. For example,
if you own a $50,000 house with a $40,000 mortgage, you count
your exemptions against the $10,000 equity you have in the
home. While your exemptions allow you to keep property even
in a chapter 7 case, your exemptions do not make any difference
to the right of a mortgage holder or car loan creditor to
take the property to cover the debt if you are behind. If
you are behind in payments and can afford to make the loan
payment and to make the amount you are behind over a period
of three to five years you should consider a chapter 13 bankruptcy.
In a chapter 13 case, you can keep all of your property
if your plan meets the requirements of the bankruptcy law.
In most cases you will have to pay the mortgages or liens
as you would if you didn't file bankruptcy.
If you still have questions you can schedule a free consultation with a bankruptcy attorney.
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