The ultimate purpose of filing for bankruptcy is to pay off your creditors and absolve your debts. For many people, bankruptcy provides a clean slate and a second chance at financial stability. However, before you make any decisions about filing for bankruptcy, it’s important to discuss your personal financial situation with an attorney.
The first step in filing for bankruptcy is deciding if Chapter 7 or Chapter 13 best fits your financial needs. Chapter 13 involves a 3-5-year repayment plan that absolves your debts and allows you to keep your property. However, most debtors have difficulty meeting its qualifications. Alternatively, Chapter 7 is the most popular bankruptcy option because the court assigns a trustee to sell, or “liquify,” a debtor’s assets in order to discharge their debts.
Your liquefiable assets and property are considered your “bankruptcy estate.” Per state and federal laws, you’re legally allowed to exempt certain assets and property from your bankruptcy estate so long as they are deemed essential to your financial recovery, your profession, or your basic lifestyle.
Exempt property may include:
- Cars (up to a certain value)
- Clothing (as deemed necessary by the court)
- Certain household goods
- Equipment related to your profession
- Public benefits
Nonexempt property, on the other hand, includes any assets that aren’t considered necessary for your financial recovery.
Nonexempt property may include:
- Bank account balances
- Family heirlooms
- Musical instruments
- Secondary homes
- Secondary vehicles
Seek Legal Guidance
Contact Bach Law Offices if you’re interested in filing for Chapter 7 bankruptcy. Our Northbrook bankruptcy attorneys can evaluate your financial situation and help you determine which assets can be exempted from your bankruptcy estate.
We want to help you restart your life. Call our Northbrook bankruptcy attorneys at (847) 448-0025 to schedule a free in-person consultation.