4 Important Assets You Can Lose in Chapter 7

assets

Filing for Chapter 7 bankruptcy can be a challenging and stressful experience, but it can also be a fresh start. This type of bankruptcy can offer relief when dealing with overwhelming debts. However, it may have significant consequences on your assets and property.

It’s essential to understand which assets you can lose after filing for Chapter 7 bankruptcy to make a sound financial decision. In this blog post, we will discuss five critical assets that can be affected after a Chapter 7 bankruptcy.

1. Real Estate Property

In Florida, it’s unlikely that you’ll lose your primary residence just because you filed for Chapter 7. As long as you aren’t behind on your mortgage, there may not be a reason to worry about losing your home. This is because Florida provides an unlimited homestead exemption, allowing most homeowners to protect all of the equity they have in their homes.

That said, there is no similar exemption for any other real estate property you may own. Any other real estate you own, such as rental properties or a vacation home, could be liquidated in Chapter 7.

2. Investments

Chapter 7 bankruptcy could also result in losing your investments, such as stocks, bonds, and mutual funds. These assets are considered non-exempt and could be sold by the trustee to pay off your debts. However, there are certain exemptions that may apply, depending on the state where you live. You should check with a bankruptcy attorney to see if you qualify for any exemptions that could help you keep your investments.

3. Retirement Savings

Most retirement accounts, such as 401(k)s, pension plans, and IRAs, are generally protected from being sold in bankruptcy. However, some retirement accounts may not be exempt from bankruptcy. Make sure to confirm with an attorney to ensure you can protect assets you intend to use for retirement.

4. Family Heirlooms

If you own any family heirlooms, the bankruptcy court may view them as assets and can liquidate them as such. Whether it’s jewelry, furniture, artwork, etc., if a family heirloom in your possession potentially has significant value, it may be seized and liquidated.

You can potentially avoid this outcome, however, by leveraging the wild card exemption that allows you to protect up to $1,000 in asset value from liquidation.

Contact a Lawyer for Professional Guidance

Before filing for Chapter 7 bankruptcy, it is always advisable to consult an experienced bankruptcy attorney to help you maximize your exemptions and protect your assets. Remember, bankruptcy may be a fresh start, but it’s important to be aware of the consequences to make a sound financial decision.

For legal help you can count on, contact Buchalter & Pelphrey Attorneys At Law. 

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