Talk to Your Bankruptcy Lawyer About Assets

Assets are a critical component of your initial conversation with a bankruptcy lawyer. When you meet with this professional for a consultation, one of the most important discussions you need to have is about your assets. These are items you own or partially own that have value. It includes everything from your antique family heirlooms to your computers and electronics. The more you have, the more vital it is to discuss your case with your attorney. The good news is you may be able to protect some of these items.

The Right Type of Filing

If you have a high amount of assets, you will likely want to discuss Chapter 13 with your bankruptcy lawyer. This process does not require the sale of any of your property during the filing process, unless you no longer want to own it. Rather, you will spend three to five years making a payment to the court's trustee, who will then pay this money to your lenders. If you do not have assets, filing Chapter 7 may be better. It allows you to discharge (or get rid of) all of your debt within about six months. Here, any assets are normally sold and the value is paid towards your debt.

What About Exemptions?

Each state and the federal government have exemptions set up to help individuals who are filing. An exemption is simply a specific type of property or asset that is protected up to a specific value. For example, some states have a vehicle exemption, which will protect one car up to a certain value. Some will protect home equity up to a specific value. Other potential exemptions include tools of the trade (items you need for work) as well as cash on hand, jewelry, personal effects and educational equipment. This varies by state, but your bankruptcy lawyer will help you to find out if your assets are protected.

Keeping Assets

If you want to keep paying on your mortgage and it is up to date, you may be able to do that as long as the equity is not above the exemption limit. On the other hand, if you are facing foreclosure because you are behind on your debt, filing bankruptcy will not stop that process. You need to work with the lender to get caught up or you can still lose your home. The same applies to any other assets you have a debt on.

Making the right decision for your situation can be a challenge. With the aid of a bankruptcy lawyer, you may be able to avoid some of these complications by simply learning what your options are. Don't make the wrong decision and assume your assets are protected.