Whether you file for Chapter 7 or Chapter 13 bankruptcy, bankruptcy is a serious situation that will undoubtedly impact all aspects of your life. Bankruptcy gives people the opportunity to walk away from their debt completely or create a repayment plan in which they can pay it off.
You may face having to give up some of your most prized possessions from your home, to your car, to any investment properties that you might own. Being informed and understanding how bankruptcy will affect your daily life and possessions is one of the most important things you can do.
The following sections provide more information on how bankruptcy will affect you and your life:
Bankruptcy exemptions permit you to be able to keep some of your property and assets safe from being liquidated. Exemptions will either protect the entire value of the asset or up to a certain monetary amount. If an asset qualifies for an exemption, it will remain untouched and unaffected by your bankruptcy. Read more about bankruptcy exemptions here.
If you file for Chapter 7 bankruptcy and are current on your mortgage payments, there is a good chance you will be able to keep your home. Some individuals lose their home if there is a great deal of equity, as this may be able to be used to pay off creditors. Learn more about how bankruptcy impacts your home here.
When it comes to filing for bankruptcy and your vehicle, you will have to make a choice whether you are going to give up your vehicle or hold on to it by continuing to make payments. Once you have decided, you will inform the court by filing a Statement of Intention (SOI) and mail a copy to your vehicle creditor. If you have a lease, you have the option of rejecting it on your SOI or keeping your vehicle by assuming the responsibilities of the lease.
If you own investment property, what happens to it primarily depends on whether you file for Chapter 7 or Chapter 13 bankruptcy. Read more about how bankruptcy impacts investment property