ONE common misconception people have is that if they file bankruptcy, they will lose everything that they’ve worked hard for. For this reason, a lot of people continue to suffer needlessly in debt when the law provides a solution to their debt problems. Not good.
Don’t get me wrong. Bankruptcy is certainly not the answer to all debt problems. But after having represented more than 5,000 bankruptcy clients over the years, I’ve seen the benefits it provides to people who are no longer in a position to help themselves.
In bankruptcy, there are exemptions allowed that can help you protect your assets. For example, if you own a home, state homestead exemption laws allow you to protect anywhere from $75,000 to $175,000 of your equity depending on your marital status and your age at the time of filing. If the amount of your home equity falls within the allowable exemption amount, your house is not at risk in any way. Thus, even if you file for bankruptcy, you can keep your home as long as you are making your payments.
Most bankruptcy cases are considered “no asset cases”. That means that the debtor literally has nothing of value or the assets are considered protected under the exemption laws. So don’t ever believe it when creditors or other people tell you that filing bankruptcy means that you automatically have to lose your home, vehicles or other assets. Your bankruptcy lawyer should be able to do a thorough review of everything you own and advise you what is exempt and what is not. For example, in almost 100% of the cases my office handles, clients lose nothing and keep everything. But of course, every situation is different and that is why you need a good and knowledgeable bankruptcy attorney.
If you are filing for Chapter 13 to consolidate your debts, none of your assets are at risk of being taken. This is due to the fact that Chapter 13 is simply a repayment plan. In Chapter 13, you are committing your income to pay creditors the best you could over a 3-5 year period. No assets are sold to pay your debts although it may be possible for you to sell assets voluntarily to pay off your plan earlier. I am trying to simplify here but the point is that in Chapter 13, you can keep everything you have and you can pay creditors based only on what you can afford. This allows you to live within your means- by making your debt payments more affordable.
If you are in debt and are considering filing bankruptcy but are not sure if this is right for you, I can help you make the right decision by explaining to you how the process works. Just call my office at 866-477-7772 and ask for a free initial consultation. As this year comes to a close, make it a goal to be the last year you will remain in debt. It’s not too late to start over. Rebuild your finances and your life.
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None of the information herein is intended to give legal advice for any specific situation. Atty. Ray Bulaon has successfully helped thousands of clients in getting out of debt. For a free attorney evaluation of your situation, please call Ray Bulaon Law Offices at TOLL FREE 1 (866) 477-7772.