Chapter 7 bankruptcy also goes by the name liquidation bankruptcy, which may be why many Texas consumers are hesitant to take this step, even when they may be overwhelmed by debt. Bankruptcy is a good choice for consumers who can no longer manage their financial situation and need an effective way to deal with their debt once and for all, but fears and misconceptions may hold them back.
If you find yourself facing overwhelming debt, harassment from creditors or other challenges, you may benefit from filing for bankruptcy. However, despite the fact that Chapter 7 is liquidation bankruptcy, you may not have to give up all of your assets. It may be helpful to know which of your assets will be exempt from bankruptcy liquidation.
What do I get to keep?
It's normal to have fears over what will happen during the bankruptcy process. Fear of the unknown may keep you from making a decision that could improve your future and allow you to deal with your debt. It can be helpful to know about how property exemptions work. In most cases, Chapter 7 applicants will be able to keep things related to the following:
- Assets necessary for work: This includes your tools of the trade.
- Property necessary for your home: This includes necessary furniture, appliances and normal household goods.
- Items necessary for daily life: This can include necessary vehicles, jewelry or damages you won from a personal injury claim.
While you will likely be able to keep most of the property you hold dear, there are some possessions that will be subject to liquidation in order to pay off at least a portion of the debt. This may include valuable objects like musical instruments, collectible items and second homes or vehicles. Bankruptcy is a complex process, but when you know what to expect, it is easier to navigate.
Your strong financial future
When you are overwhelmed by debt and have nowhere to turn, you may feel like you have no options. Chapter 7 bankruptcy could be a way out, however, by offering you a way to reach a better financial future. You do not have to live your life dictated by creditors and debt collectors.
The point of bankruptcy is not to rob you of all of your stuff but to help you effectively confront your debt. If you have concerns about what this choice means for you on a personal level, you may find it beneficial to seek an evaluation of your case and learn more about your options.