If I File Chapter 7, Will I Lose My Family Heirlooms?

Being overwhelmed with debts and falling behind in payments can leave you subject to high-interest rates, heavy penalties, harassing credit collections calls, and legal actions, such as wage garnishment and lawsuits. Filing a Chapter 7 bankruptcy in Indiana can provide a solution to your problems, but one of the most common concerns among clients is their rights regarding personal property. This is particularly true when it comes to belongings that have strong sentimental value, such as family heirlooms. Find out how our Indiana bankruptcy attorney can protect your rights to these possessions while still helping to eliminate your debts.  

Chapter 7 Bankruptcy and Property Ownership

Provided as a means for people currently overwhelmed with debts to get a fresh start, Chapter 7 bankruptcy is often referred to as a liquidation. It can help in eliminating unsecured debts, such as medical bills, personal loans, and credit card balances, but may require surrendering certain property, This generally applies to items that are non-exempt or exceed current state or federal exemption limits, such as: 

• Expensive sports cars;
• Luxury homes and vacation properties;
• New boats, campers, or other costly recreational equipment;
• Collections of furs, jewelry, or other high value items;
• Any personal property you are continuing to make payments on. 

In regards to family heirlooms, much will depend on the type and overall worth. If the value is primarily sentimental, you should be fine. If they are worth substantial sums, they may fail to fall within exemption limits. 

Are My Family Heirlooms Non-Exempt?

In dealing with family heirlooms or other types of personal property in Chapter 7 bankruptcy proceedings in Indiana, you will want to be aware of how state exemptions work. Under the Indiana Code, you are entitled to maintain ownership of certain types of property, despite filing a bankruptcy petition. In addition to wages, unemployment benefits, and pensions, this also includes certain personal property, which is subject to state exemption limits. 

For example, the homestead exemption in Indiana is $19,300 and allows you to retain ownership of clothing and items such as furniture, TVs, laptops, and home decor. Family heirlooms are included in this category. If these and other personal property exceed the homestead exemption amount, there is also a wildcard exemption you can take in the amount of $10,250. This is frequently used for items such as a car or excess household belongings, but can also help cover antiques, artwork, or other family collectibles. 

Discuss Your Case With Our Indiana Bankruptcy Attorney

It is natural to have concerns about family heirlooms or other cherished items and to want to keep these despite filing for bankruptcy.  To discuss the options in your particular case, contact Whitten & Whitten and request a free consultation with our Indiana bankruptcy attorney today.