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Debt Management Law News

January 19, 2010

Will I Lose My Property in a Chapter 7 Bankruptcy?

If you are considering a chapter 7 bankruptcy in Houston, then you will need a qualified

bankruptcy lawyer who will be able to examine your case, and help you determine what kind of

bankruptcy is appropriate for your situation. There are two main types of bankruptcy – Chapter 7

and Chapter 13.

Debt is handled different in each type of Bankruptcy, so if maintaining your assets is your

largest priority, then a chapter 7 may not be the best option for you. In a chapter seven

bankruptcy, debtor assets are sold, or claimed by creditors in the forms of liens or mortgages to

pay off debt. A Chapter 13 bankruptcy differs in the fact that you may maintain all your assets,

but must create a payment schedule to repay debts in full.

If you are underwater on a mortgage, or own assets that act as a drain on your gross wealth, a

chapter 7 may be a good option for you. Debt from boats, cars, or other large purchases can be

forgiven in a chapter 7.

There is a cost associated with filing a bankruptcy. This is not relegated to the costs of the

process. You will also be legally required to inform potential employers or debtors about this,

if asked. The bankruptcy will remain on your credit report for seven years in some cases, and may

affect your chances of getting a home, buying a new car, or even landing a job. Consider this

carefully before you plan to file bankruptcy, and ensure that you can handle this high price.

In a chapter seven bankruptcy, you must also be prepared to relinquish some of your property in

return for being clear of debt. There is a list of items on the federal and state level that you

will be allowed to keep. It’s important that you discuss your possessions with a qualified

bankruptcy attorney, so that you can get a clear understanding of what items you will be able to

keep, and which will be taken. You will also need help deciding whether the federal or state laws

are the best for your situation.

If you file a chapter 7, here are some items that you will not be able to keep

* Collectibles, or large collections
* Cars, above one vehicle for personal transport
* Monetary assets, like CD’s or investments
* Family items with intrinsic worth

You may be able to keep the following, depending upon your profession and personal situation:

* Professional tools required by your job
* Everyday living items, such as clothing, basic furniture, or housewares
* Benefits supplied by the government, such as social security, Medicaid, or Medicare
* IRA’s, 401(k)’s or pensions

It’s advised that you work with a bankruptcy lawyer to make the difficult decisions you are going

to be facing, such as whether or not to file, which guidelines to use, and how to fill out the

paperwork.

Sometimes, debt can be overwhelming, and bankruptcy becomes necessary.
Bankruptcy can sometimes be difficult. If you are considering bankruptcy, contact the Houston bankruptcy lawyers of Weston & Associates, PLLC at 713-623-4242

myhoustonbankruptcyattorney.com


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