When you declare that you are unable to pay your debts, you are declaring bankruptcy. This word has a negative connotation but for millions of filers, this act provides an opportunity for a fresh start. Declaring Chapter 7 bankruptcy also places your personal financial situation in the hands of the bankruptcy trustee who oversees your case. This means that some of your personal belongings could be subject to seizure. This scary issue should serve as a point of education only because most consumer filers don't lose their property. Read on to learn more about seizures, exemptions, and your income.
How Seizures Work
There are a number of ways to protect property like homes and vehicles from bankruptcy seizure. You might want to make a list of your assets and ask your bankruptcy attorney about the potential for seizure. Property that is seized is only done so if it can be sold. That means it must have value on the marketplace and we all know the marketplace can fluctuate. Your debt level also influences this issue — if you have only $25,000 in total debt, it is unlikely that your $250,000 home will be seized and sold. In most cases, your property is only taken if the value of it exceeds the amount of your state's exemptions.
How Wages and Income are Treated
Your salary is considered an asset along with your home, car, artwork, jewelry, land, etc. When you fill out your bankruptcy paperwork, there will be questions about your income from all sources. In most cases, your earned income is safe from seizure once you file. Earned income is money you get from working at a job. Other forms of income include rents, interest, dividends on investments, sales of assets, etc.
If you have income coming to you from a past job, it may be subject to forfeiture. For example, there may have been a delay in paying you for a previous job. Some people are paid on an irregular basis and money paid after a bankruptcy filing must be used for usual and customary expenses. That money is not necessarily in jeopardy if you can show that you need the money to pay an expense like a car repair, buying food, rent, etc.
The point of bankruptcy is not to leave filers with no financial means at all. If you are in fear about a filing, allay those fears about property loss by speaking with a Chapter 7 bankruptcy attorney today.
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