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If I file for bankruptcy, will I have to give up my stuff?

Filing for bankruptcy is never an easy decision. One of the most common things that holds Ohio residents back from making this often beneficial decision is fear of losing personal property. While this is a normal fear, people who file for Chapter 7 bankruptcy often find themselves relieved to learn that they can, in fact, keep many or most of the things they hold dear.

Chapter 7 bankruptcy also goes by the name liquidation bankruptcy. However, there are exemptions that may apply to your case, protecting certain assets and keeping you from having to liquidate important things. If fears over your property are preventing you from seeking a better financial future through bankruptcy, you would be wise to seek a better understanding of what the Chapter 7 bankruptcy process entails.

What counts as exempt property?

Generally speaking, exempt property includes that which is necessary for everyday life. The intent of bankruptcy is to relieve you from overwhelming debt, not leave you destitute, and you may be surprised to learn what property you can shield from the bankruptcy process. In many cases, exempt property can include:

  • Tools and equipment needed for work
  • Necessary clothing
  • Household appliances and goods, including furnishings
  • Some jewelry
  • Wages earned but not yet paid
  • Pensions
  • Motor vehicles up to a certain value
  • Equity in the debtor's home
  • Damages won through a personal injury claim
  • Public benefits

Fortunately, filing for bankruptcy does not mean that you will have to give up everything that you need for comfort and daily life. However, there are certain types of property that are not exempt, and, therefore, eligible for liquidation in Chapter 7 bankruptcy. These types of property include:

  • Stocks, bonds and investment portfolios
  • Cash and savings accounts
  • Extra vehicles
  • Family heirlooms
  • Collectibles and items in valuable collections
  • Second homes

Learning about exempt property and the Chapter 7 bankruptcy process can help you determine if this choice is right for you.

Securing a strong financial future

When crushed by overwhelming debt with no way out, you may be unsure if a strong financial future will ever be possible for you. Bankruptcy may be a viable way for you to address your debt, discharge balances and work for a better future for you and your family. It may not be your first choice, but bankruptcy could be the right choice.

If you have concerns about how this process works, you would be wise to seek a complete understanding of the property you can keep, how this step helps get rid of debt and how you can initiate the Chapter 7 bankruptcy process.

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