Are You Considering Bankruptcy but Afraid of Losing Your Assets?
Jan. 3, 2022
If you file for bankruptcy, will you lose your house? Will you lose your car? As a St. Louis bankruptcy lawyer, people ask me these types of questions all the time. The short answer is that, in most cases, yes, you can preserve your assets after filing for bankruptcy protection.
Types of Debt
Before getting into this topic more, it is essential to understand the two kinds of debt: secured and unsecured. A secured debt is one in which the creditor could take the item you've financed back if you default on your loan. Common types of secured debt include mortgages and auto loans. As you probably guessed, unsecured debt is one in which a creditor can not take the financed item back if you default. Common forms of unsecured debt include credit card debt, medical bills, and personal loans.
Protecting Your Assets Under Chapter 7 Bankruptcy
It is best to seek a bankruptcy attorney’s advice, but, generally speaking, people can protect their homes with something called a “homestead exemption.” A homestead exemption allows people filing for bankruptcy, including Chapter 7, to protect up to a certain amount of the equity they have in their home. The amount of equity that can be protected varies from state to state. If you’re located in St. Louis, Missouri, we are happy to consult with you about using a homestead exemption to protect your home from seizure.
AKS Law can advise you on a variety of strategies to protect your assets during bankruptcy, regardless of which chapter, including how to potentially keep your credit cards! Perhaps filing a "Chapter 20" is your best option - filing both a Chapter 7 to wipe out your unsecured debt and a Chapter 13 to set up manageable repayments of your secured debt.
Protecting Your Assets Under Chapter 13 Bankruptcy
There are different types of bankruptcy. When most people think of bankruptcy, they think of what is known as Chapter 7. This type of bankruptcy simply requires people to file the required documents, and then (generally) their unsecured debts are wiped out. However, the bankruptcy court offers another type of protection of which many people are not aware--Chapter 13.
Chapter 13 allows consumers to set up a manageable repayment plan through the court. Because your debts are not simply wiped out in Chapter 13, consumers can keep their secured loans (their homes, their cars). Instead of juggling a myriad of different bills and payments each month, you'll make just one payment. For most people we've worked with here at our St. Louis bankruptcy law firm, this comes as a huge relief. Read more about saving your home in Chapter 13 here on our blog.
Find Out How to Protect Your Assets in Bankruptcy Today
"Andrew handled our case with professionalism, promptness, and even humor at times," wrote an anonymous AKS Law client. With years of experience and numerous testimonials like this one, St. Louis bankruptcy lawyer AKS Law has a wide variety of strategies and options to potentially help you protect your assets. Find out today by calling us at 314-740-2989.