I Am Considering Filing For Bankruptcy – Will I Lose Everything?

Don’t Lose Your Property During Bankruptcy, Contact A Top Griffith Bankruptcy Lawyer Now.

Making the decision to file for protection under bankruptcy is a big decision that a debtor typically gives much consideration to prior to filing. One of the most common questions those considering bankruptcy may have is exactly what they will lose as a result of filing. Bankruptcy exemptions are the mechanism within the bankruptcy process that determine what a debtor will be allowed to keep. An exemption may either protect a specific item, such as a piece of jewelry, or it may provide for a specific value of an asset ranging from some set amount up to its full value. Many jurisdictions also have wildcard exemptions, which can be used to protect any asset you choose. One important note is that certain debts are not dischargeable, so a debtor is not able to use any available exemptions to erase those types of debts. Exemptions work differently depending upon under which chapter of the bankruptcy code you file. In a Chapter 7 bankruptcy, the exemptions determine what you can keep, and in a Chapter 13 bankruptcy, the exemptions will help to determine what the plan payments will be.

Exemptions – How Do They Work With The Different Types Of Bankruptcy?

When a debtor files for a Chapter 7 bankruptcy, the trustee looks at the assets to determine what, if anything, can be sold off, or liquidated, to repay creditors. Assets that are exempted, however, cannot be sold off and, therefore, the debtor can keep the asset. Under Chapter 13 of the Bankruptcy Code, a debtor is also allowed to keep property and must reorganize debts. With this type of bankruptcy, creditors such as credit card issuers are paid based on the value of nonexempt assets; therefore, the exemptions are applied to the assets in such a way as to minimize the values – thereby minimizing the amount that the debtor is required to pay his or her creditors. This process works to keep the reorganization payment plans as low as possible.

Indiana Exemptions

Indiana, as every other state, has its own set of exemption laws that guide how assets will be handled in each of the types of bankruptcy. When married couples file jointly, the bankruptcy law generally allows each partner to use each exemption and, in Indiana, debtors are allowed to use certain federal exemptions in addition to those specifically set forth by state law.

Reach Out to Us for Assistance

When considering bankruptcy, it is important to understand the entire process from the start. At Whitten & Whitten, we have a wide variety of experience with all types of bankruptcies and are ready to help you too. We will explain your rights and responsibilities under the Bankruptcy Code and make sure you have considered all of the issues associated with your bankruptcy process. Contact us today online or call us at 219.756.0555 for your free consultation and get started on the path towards a fresh start.