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You can keep important property during Chapter 7 bankruptcy

On Behalf of | Jul 5, 2018 | Chapter 7 Bankruptcy, Firm News

For those in dire financial straits, bankruptcy is usually the best option for debt relief. Chapter 7 bankruptcy is a popular choice for many people in Florida, as, unlike Chapter 13, it does not require a repayment plan before debts are discharged. However, many debtors worry that they will have to give up every last asset they own in order to take advantage of this process. 

Chapter 7 bankruptcy requires the debtor to hand over non-exempt property, which is then sold. The funds from these sales are then paid out to satisfy some of the person’s creditors. While yes, this means that some property will have to go, it does not mean that an individual will have to give up every last item he or she owns. 

Exempt property are items a person may keep during the bankruptcy process and may vary from person to person. For instance, expensive musical instruments are usually non-exempt unless the debtor is a professional musician. A garage full of tools is also non-exempt unless they are used as part of the person’s profession or trade. Most people can expect to keep their primary source of transportation and reasonably necessary clothes and furniture. 

Giving up everything for a taste of financial freedom sounds scary and a bit unrealistic. How can a Florida resident be expected to rebuild his or her future if he or she has to start over from scratch, without even a vehicle to get to and from work? In Chapter 7 bankruptcy, many necessary assets are exempt from being sold off, so debtors can feel assured that their livelihood will not be negatively impacted as they seek a better future. 

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