Loss of assets in bankruptcy, do I lose everything?

Whether or not you lose your assets when you file for bankruptcy depends on the type of bankruptcy you file and the laws of your state.

If you file for Chapter 7 bankruptcy, you may be required to liquidate some of your assets in order to pay your creditors. However, most states have exemptions that allow individuals to keep certain assets, such as a primary residence, personal property, and tools of the trade. These exemptions vary by state, so it is important to consult with a bankruptcy attorney to understand the exemptions that apply in your state.

If you file for Chapter 13 bankruptcy, you will be required to use your future income to repay your creditors over a 3 to 5 year period. However, you will be allowed to keep all of your assets, and you will not be required to liquidate any assets in order to pay your creditors.

It’s important to note that if you have assets that are not covered by exemptions, they may be liquidated in a chapter 7 bankruptcy and the proceeds will go to the creditors.

Before filing for bankruptcy, it is important to consult with a bankruptcy attorney who can help you understand the laws in your state, evaluate your assets and liabilities, and advise you on the best course of action for your particular situation.