Declaring bankruptcy is sometimes necessary to get out of debt. If you are in a situation that requires you to file for bankruptcy, you likely have a few questions.
The first question you probably have is about your possessions. For instance, is it possible to declare bankruptcy and keep your house and car? The short answer is it depends. Bankruptcy is not a magic pill, and even amongst the bankrupt, there are varying degrees of severity. See below for explanations of two different types of bankruptcy and how likely you are to keep your possessions.
Under Chapter 7 bankruptcy, you will likely have to liquidate your possessions to pay for debts unless you qualify for exemptions. In New York, you can choose between Federal and State exemption laws. If you choose New York exemption law, you can protect a certain amount of equity on your home depending on your county. For motor vehicles, you can keep one automobile if its value is under a certain amount. If you file as a married couple, the amount you can protect doubles.
Chapter 13 bankruptcy allows you to keep your property if you can make regular payments towards your debt. Chapter 13 is a prescribed payment plan that you must follow to catch up on your debts. If you want to qualify for Chapter 13, you must earn enough wages to make the monthly payments and any other expenses you incur.
The intricacies of bankruptcy and keeping your possessions are too complicated to explain in this short article fully. If you think declaring bankruptcy is the best option for your situation, contact a lawyer to help make your decision.