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Property people can keep during bankruptcy

| Jan 12, 2021 | Bankruptcy

There are many different types of items that people purchase in Houston. Some may me small items for daily life and some can be major purchases like a home or cars. Some of the purchases can be made with the money that people have on in their accounts, but the bigger purchases may require people to take out loans or mortgages. In addition, there are also many expenses people have to pay for each month like utilities.

This means that it is pretty common for people to have some debt that they must manage. Much of the time this is not a major issue, but life is unpredictable and unexpected events occur. People can suffer injuries or develop diseases which require extensive medical treatment and may force people to miss time at work. If this occurs, people may have a difficult time paying their existing debt in addition to incurring additional debt. People may soon find themselves overwhelmed by their debt and may not see a way out.

Exempt property in Chapter 7 bankruptcy

People do have options though and one of them is to file for Chapter 7 bankruptcy. Through this process people can have their debt discharged, but some of their property will be liquidated to pay the creditors. However, there are exemptions which are protected from being liquidated. These exemptions include, but are not limited to:

  • A person’s house, but there are limits how much equity they may keep exempt
  • One vehicle
  • Personal belongings such as clothing, appliances, home furnishings, jewelry and other property
  • Tools people need for their business and
  • Personal injury awards

There is other property that people in Houston may be able to protect during the bankruptcy process as well. People who file for bankruptcy do not need to start their lives over completely from scratch yet are still able to free themselves of their debt. This can be a long and complicated process though. Experienced attorneys understand the process though and may be able to help one achieve a fresh start.