Dealing with unmanageable debt, missed payments and harassment from creditors can be overwhelming, leaving you feeling hopeless. When you are in debt, it may feel like there is no way out, but in reality, Wisconsin residents have various options available to them. You may know that you could file for either Chapter 7 or Chapter 13 bankruptcy, but for many consumers, Chapter 7 is a beneficial choice.
One of the main concerns that hold people back from making this important choice for their financial future is a fear over what will happen to their personal property. There are often misconceptions that by filing for bankruptcy, a person will lose his or her property, but that is not the case. You may be surprised to learn that you can file for Chapter 7 and still keep your stuff.
What qualifies as exempt property?
The intent of bankruptcy is not to leave a person destitute, but rather, it is to allow a person to effectively confront his or her debt and build a stronger financial future. While Chapter 7 also goes by the name of liquidation bankruptcy, this does not mean that all of your personal assets will be eligible for liquidation.
In fact, the U.S. Bankruptcy Code provides certain exemptions for many assets. The following may be exempt from liquidation during the bankruptcy process:
- Vehicles worth less than a certain dollar amount
- Tools of the trade and stuff needed for work
- Pension accounts
- Jewelry, up to a certain amount
- Household appliances and furniture
- Necessary clothing and personal items
- Public benefits and assistance
- A portion of the equity in the home
- Unpaid wages already earned
This may be encouraging news for you to learn that you will get to keep many of the things that are important to you. However, there are some things that you may have to give up by filing for Chapter 7 bankruptcy relief, and that includes cash, valuable collectibles, second homes or vehicles, and more.
Making the decision to have a better future
Filing for bankruptcy is rarely a person’s first choice, yet for you, it could be the right step toward a better financial future. If you are unable to manage your debt burden and don’t see another way out, you may consider the benefits of filing for Chapter 7 bankruptcy. The choices available to you will depend largely on your income, the types of debt you owe and other details of your individual financial situation.