Chapter 7 bankruptcy allows forgiveness of almost all debts. In this type of bankruptcy many assets can be seized by the federal court to offset any creditor losses. There are some assets however, that can not be seized. Those who file Chapter 13 bankruptcy do what is known as a debt restructuring. Under this type of bankruptcy individuals typically do not lose much of their assets or property, since they are repaying a large portion of their financial debt.
Any second home or land is usually taken in almost all bankruptcy cases. If someone filing for Chapter 7 has been unable to keep up on mortgage payments they may lose their primary residence as well.
Retirement accounts such as IRAs and 401Ks cannot be taken in any bankruptcy proceeding.
Vehicles used for recreation such as boats, motor homes, motorcycles, or a second car are usually seized in a bankruptcy case.
Any inheritance you receive within six months of filing your bankruptcy CAN be taken to repay debts and creditors.
Cash and Banking Accounts
Any cash you have accessible or a checking/saving account, is usually seized in Chapter 7 bankruptcy.
Something many people don’t count under the “loss” category is your Credit Score. Whether you file Chapter 7 or Chapter 13 bankruptcy, your credit score will suffer greatly. You can lose the ability to obtain even inexpensive credit for the entire time your bankruptcy is on your record.
Before you take the next step to file for bankruptcy you should consult with a professional who has experience. Eron Epstein has over 30 years experience and will take time with you to explore your options.
Call Eron Epstein today for a free consultation at 423-752-3000
Written by: Rebecca Kidd