The Impact of Chapter 7 and Chapter 13 on Your Property Rights
You’re struggling to meet your financial obligations because you’ve been laid off, you’re going through a divorce, or you’ve incurred substantial medical expenses not covered by insurance. You know filing for bankruptcy can help you get a fresh start, but the last thing you want or need right now is to risk losing your property. How can you get the benefits of bankruptcy relief without putting your possessions in jeopardy?
Keeping Your Property in a Chapter 13 Filing
Let’s look at Chapter 13 first, as the answer is more straightforward. Chapter 13 is essentially a supervised renegotiation of your debt. You prepare and submit a plan to repay your creditors in a manageable way. The plan is approved by your creditors and the court. In a Chapter 13 bankruptcy, your property is never at risk, unless you fail to honor your commitments under the reorganization plan. As long as you make payments according to the plan, your creditors have no claim to your property
Keeping Property with a Chapter 7 Filing
Chapter 7 is usually more attractive to debtors, as it allows you to permanently discharge debt (in other words, you have no further legal obligation to pay it). However, there’s a trade-off, as you must transfer certain assets to the bankruptcy court to be used or sold to satisfy your creditors. You don’t have to give up all your property, though. Certain types and amounts of property are exempt under the federal bankruptcy laws, and there are state exemptions as well. However, you must choose to take either the state or the federal exemptions—you can’t mix and match. Both state and federal law allow you to keep some equity in a home and a motor vehicle, as well as varying amounts of personal property.
Contact an Experienced Rockwall, Texas, Bankruptcy Attorney
At the Law Offices of Carrie Weir, all potential clients are entitled to a free initial consultation. I can help you determine the extent to which you can keep property in a bankruptcy filing and whether it’s to your advantage to take the exemptions under state or federal law.
I am currently communicating with clients by phone, text message, and videoconference. To arrange an appointment, contact my office online or call 972-772-3083. I handle Texas personal bankruptcy filings in Rockwall County, Collin County, Dallas County, Hunt County, and the surrounding counties.
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