If you’re saddled with debt, but still have plenty of assets, you may be considering how much in assets you can have when filing for bankruptcy. This depends on your state’s bankruptcy laws, but usually there is no maximum level of assets that will prevent you from filing bankruptcy, particularly if you're filing Chapter 13. There are however income restrictions and debt limits that affect eligibility to file.
The more pressing concern may be how bankruptcy may help you protect your assets after your filing. To find out exactly how your important property may be affected, speak with a bankruptcy lawyer during a free case evaluation. Complete the form on this page to connect.
If you have a lot of assets, but are buried in debt, know that you may still likely be able to file bankruptcy.
You will not, however, usually be able to file for Chapter 7 bankruptcy if your income is higher than the average income in your state. As a result, people with multiple assets typically file for Chapter 13 bankruptcy.
Chapter 13 bankruptcy offers the strongest protections for many types of property, and it may allow you to keep a number of valuable assets, including:
How does Chapter 13 allow all this? When you file, the bankruptcy court will help you create a consolidated debt plan. Your debts will be ordered, and in many cases reduced. Then, you will make regular payments on this plan over the course of 3 to 5 years to your court-appointed trustee.
By making regular payments on this debt plan, you may be able to catch up on debt payments while holding onto your valuable pieces of property. You may also be able to discharge some unsecured debts at the end of your bankruptcy proceeding.
If, on the other hand, you have very limited assets and are concerned about keeping them after bankruptcy, you may be better suited filing Chapter 7. Through Chapter 7, you may be able to eliminate some or all of your unsecured debts, including medical and credit card debt.
If you go this route, you'll want to learn how Chapter 7 exemptions apply to you. These are the laws that protect your property from a forced sale by creditors. Laws vary by state, but protected property often includes:
So, if you have limited assets, bankruptcy will not necessarily take everything you own. On the flip side, even if you have numerous assets, you may still be able to file bankruptcy.
To learn more about what happens to assets when filing bankruptcy, arrange a free consultation with a local bankruptcy lawyer today.