How an asset protection plan can keep the repoman away

If you've missed the last several payments on your car, truck or boat and plan on filing for bankruptcy without asset protection, there is a good chance you will lose some of these important belongings. As you may have seen on TV, this is not a pretty picture. No one wants to lose a large piece of their personal property, which they may have put a great deal of money into, because of a few missed payments.

If this doesn't sound like your dream come true, you still have options. If you are in debt over your head and don't see a means of paying off your multitude of bills anytime in the foreseeable future, you may want to look into filing chapter 7 or chapter 13 bankruptcy to relieve debt and receive asset protection.

It is often called the option of last resort because it does create long-term effects on the filer's credit score. However, if you suffer from insurmountable debt and don't do anything about it, your credit score is likely to suffer equally or even worse.

If you wake up every morning fearing the calls from creditors and feeling overwhelmed in your current situation, you may want to consider bankruptcy in order to find relief and begin again while holding onto your possessions.

Bankruptcy is a serious decision, and is important to know you have options. Filing for chapter 7 bankruptcy allows for your property to be liquidated in order to pay off as much of your debt as possible and for you to start with a clean slate. However, you should seek the guidance of a skilled bankruptcy lawyer to discover how many of your assets may be exempt from total liquidation. This results in you getting to hold on to your belongings, such as your vehicle and home, and to avoid having scary repomen (and women) beating down your door.

As soon as a person gets approved for chapter 7, the unsecured debt is discharged, creditors are no longer allowed to call and wage garnishments cease. The newly bankrupt person can breathe freely for the first time in ages and begin to rebuild his or her life.

But not everyone qualifies for chapter 7. Chapter 13 is a more complex option that requires the filer to work with creditors to pay off much of their actual debt at a rate that is easier for them. It is more labor-intensive and doesn't offer the instant relief of chapter 7 but can still be a necessary aid for those who have serious debt and don't meet the requirements. With the right lawyer, you should be able to secure asset protection under both.

To ensure you don't end up back in the same tough spot again, the law requires all bankrupt people to undergo credit counseling and debt management training. It is a small price to pay to avoid having to fight it out with an indifferent repossession agent as he hitches up your car to his tow truck.