In the unfortunate event that you find yourself in need of bankruptcy protection, you may be wondering how to protect your finances during this difficult time before you seek the help of a bankruptcy lawyer residents trust. Fortunately, there are several ways to protect your personal assets and finances through bankruptcy proceedings and while recovering from your financial hardship. Here are five tips on how to protect your finances during bankruptcy according to our friends at The Law Offices of Neil Crane, which will help guide you through this process and ensure that you can start rebuilding your credit when it comes time to file Chapter 7 or Chapter 13 documents with the courts.
Keep Track of All of Your Assets
It is important to keep track of all of your assets, including things like checking and savings accounts, stocks and bonds, retirement funds, personal property. When you file for bankruptcy protection it will be easier to avoid creditors if you are able to show that you have no money available. You can also keep track of any bank or brokerage account where you plan on having a balance below $2,000 at the time you file your petition. The following items must be disclosed on Schedule B when filing for Chapter 7: bank account balances; certificates of deposit (CDs); money market fund shares; stock or bond holdings; U.S. Treasury securities; investment funds with more than $1,000 in value; collectibles with more than $500 in value; and cash on hand.
Exemptions Can Help You Keep Certain Assets
Exemptions are areas of your finances that are protected from being seized by creditors during bankruptcy. By claiming exemptions, you may be able to keep certain assets that would otherwise not be available to you. For example, if you file for Chapter 7 and claim the homestead exemption on a home worth $300,000, your creditors can’t seize it as an asset; instead they’ll receive a payment equal to the fair market value of the home (or $150,000).
Understand Your State’s Homestead Exemption Laws
In most states, you’re allowed to protect a certain amount of equity in your home from creditors during bankruptcy. This is called the homestead exemption. But how much equity can you protect, and what’s considered a homestead? It varies from state to state. For example, in Pennsylvania you can exempt up to $150,000 in equity. Meanwhile, Florida allows for an unlimited homestead exemption on real property so long as it’s owned jointly with your spouse. The best way to find out about your state’s laws is by contacting a bankruptcy lawyer near you or checking out their website. If they don’t know, they should be able to point you in the right direction.
You May Be Able to Reaffirm Certain Debts
Not all debts are dischargeable in bankruptcy. You may be able to reaffirm certain debts, such as a car loan or student loans, by showing the court that you are capable of repaying the debt and that it is in your best interest to do so.
Seek the Help of a Qualified Bankruptcy Attorney
If you’re in the position of considering filing for bankruptcy, it’s important to seek out the help of a qualified bankruptcy attorney. The U.S. Bankruptcy Code is complicated and you don’t want to make any mistakes that could have an impact on your case. A lawyer will be able to guide you through the process and ensure that your best interests are served by making sure that all your debts are discharged or paid off in full. Contact a bankruptcy attorney in your area today for immediate assistance.