The best way to determine if you’ll lose any of your property is to speak with a qualified and experienced attorney. We can advise you as to what your rights are and how the bankruptcy process will go. Lee Legal is totally up front with our clients. We will let you know what property you can keep and what might have to be sold if you file for Chapter 7 in Washington DC.
Will I Lose Property if I File a Chapter 7?
Chapter 7 sometimes requires you to turn over some property to the bankruptcy trustee to be sold, or “liquidated.” But there are certain kinds of property that are considered exempt. Exemptions exist on the federal and state level. Familiarity with an individual jurisdiction’s rules is critical.
However, in most cases, property that is considered exempt and that you can keep during a bankruptcy filing includes:
- Most or all of your home equity
- Tools of the trade, or equipment and material necessary to conduct your business
- Cars that are not worth a lot or that you have very little equity in
- Some personal property up to a designated dollar amount
- Money in an IRA, 401K or other qualified retirement account
These are just a few of the different kinds of property that you get to keep even when you file for Chapter 7. It is important to note, though, that you may keep property only if it is not acting as collateral for secured debt and/or if you are able to get and stay current on repaying the secured debt.
In other words, if you have a mortgage on a house and a loan on a car, you can keep the house and the vehicle only if you get current on your mortgage and car loan and you make payments in full as required. You’ll need to reaffirm the debt and promise to pay it despite the bankruptcy filing. If you cannot or will not make payments to keep this exempt property, then you will not be able to keep it.
We help people file for Chapter 7 in Washington DC, Maryland, and Virginia
Exemption planning is an important part of what we do. Lee Legal can help you devise a plan to protect as much of your property as possible before you file a Chapter 7 bankruptcy. Call us if you are concerned about asset protection prior to filing Chapter 7.