Fear of Losing Personal Items in Bankruptcy Often More Myth than Reality
For many, bankruptcy is the single most reliable and realistic way to get out of debt. Yet countless eligible borrowers will never file thanks to a commonly-held fear.
Most folks believe that if they seek bankruptcy protection, they will lose their possessions, from cars to TV sets.
But in most cases, that's simply not true.
According to a recent Bankrate.com column, most U.S. states have long lists of bankruptcy exemptions that protect consumers.
For items that aren't exempt, it all comes down to your ability to pay. The good news is that bankruptcy makes payments more affordable - in a sense, it actually increases your chances of holding onto your assets.
Filing for bankruptcy doesn't mean a repo man is going to come knocking on your door. Most things in a home, such as furniture and electronics, are already paid for.
As long as a borrower continues making payments on secured items - like homes, cars and jewelry - they will be safe from repossession.
In the case of Chapter 13 bankruptcy, debt is organized into a series of manageable payments made over a period of 3 to 5 years. From the moment you file, a legal action called the automatic stay protects your home from foreclosure and stops creditors from harassing your family.
So long as you stick to your bankruptcy plan - which is individually tailored for your financial situation - no one will be able to take your things.
Chapter 7 bankruptcy puts many potential filers off with its alternative name: liquidation bankruptcy. Chapter 7 is best suited for borrowers with large amounts of unsecured debt, such as credit card debt or medical bills, as large unpaid assets may be eligible for repossession.
The best way to protect your assets is to work with a professional bankruptcy lawyer who knows the ins and outs of bankruptcy law in your state. Our experienced bankruptcy lawyers have extensive knowledge of Tennessee, Georgia, and Illinois bankruptcy law.
Most of our clients are able to keep their possessions. However, there are always exemptions and worst-case scenarios.
But think of it this way: If you don't file for bankruptcy, nothing will be exempt from creditors.
Bankruptcy was created by the U.S. government to protect consumers, not make life more difficult. If you're drowning in debt, you're only limiting your options by not taking action.
It may sound complicated, but in reality bankruptcy is about simplification - of your debts and you life. For a vast many Americans, filing for bankruptcy can be the first step toward a more secure financial future.
If you have questions about bankruptcy, we can get them answered. Call DebtStoppers today at 800-440-7235 to schedule your free personal debt analysis with a bankruptcy lawyer in Atlanta, Chicago or Tennessee.
More Blog Entries:
Lenders Suspend Foreclosures for Holidays, But Bankruptcy Offers Lasting Solution: December 3, 2012
Life After Bankruptcy Is Better Thank Most Americans Think, Says New York Times: October 8, 2012
Do Bankruptcy Creditors Want Personal Assets?, by Justin Harelik, Bankrate.com