For consumers overwhelmed by debt and past-due balances, it can seem like there may be no way out. Dealing with debt may be an insurmountable issue, which is why many people choose to seek the protection of bankruptcy. This option can provide an applicant with a way to deal with his or her debt in an organized and effective manner while also enjoying protection from collection efforts and contact from creditors.
If you are struggling with debt, you may be considering bankruptcy as a way forward to a better financial future. However, there could be some misconceptions that could hold you back from making a beneficial decision for yourself. One of the concerns that may keep you from choosing to file for bankruptcy is the worry that this decision could result in the loss of your property, particularly if you file for Chapter 7 bankruptcy.
Exempt property and non-exempt property
Chapter 7 is liquidation bankruptcy. This means you may have to relinquish some of your property in order to pay off some of your outstanding debts. However, this does not mean you will lose all your property or be destitute. Bankruptcy law provides exemptions that will allow applicants to keep certain assets. Types of property you may be able to keep if you file for Chapter 7 bankruptcy include:
- Necessary clothing
- Reasonably necessary furnishing and goods in your home
- Jewelry worth up to a certain value
- A portion of the equity in your home
- Proceeds from a personal injury claim
- Public benefits you currently receive
- Motor vehicles, worth up to a certain amount
While you will be able to keep many of your possessions during the Chapter 7 bankruptcy process, there are many things you may not be able to keep. Second homes, extra vehicles, valuable collections, cash, expensive musical instruments and more are examples of non-exempt property.
Your best financial future
The purpose of bankruptcy is to provide debt-burdened South Carolina consumers with the opportunity to seek a better and stronger financial future after struggling with debt. If you believe you could benefit from bankruptcy but have concerns about how this will impact your life, you may benefit from seeking a professional assessment of your case and explanation of the legal options available to you.