What Should I Keep In A Bankruptcy?
Despite popular opinion, filing bankruptcy does not necessarily mean you lose all of your assets. The state of California offers exemptions for debtors that allow them to protect some of their assets in various categories. The amount of these exemptions depends on many factors including the type of bankruptcy, the amount of total income, assets and liabilities in the case and various individual characteristics of the bankruptcy. Therefore, it is very important to have the advice of a good bankruptcy attorney before making decisions on exemptions.
In general, there are some guidelines you can follow as you consider what assets you may wish to keep when you file your bankruptcy. Be aware that you may be required to commit to payments for these benefits and that you may lose your assets if you fail to make the payments in a timely manner.
- Think about the true value of an asset. Most bankruptcies, including liquidations, allow you to keep some personal property. For example, there is a specific exemption for wedding bands and other important personal assets. Therefore, you may be able to keep sentimental items. However, do not try to keep an item that is very valuable based solely on sentiment. It may be better to give that item up and discharge your debts quickly than to keep something for which you have no practical use.
- Choose items you need for your new life. After bankruptcy, you will still need a washer and dryer. You will not necessarily need that expensive home entertainment system. Before you use your exemptions to try to protect luxury items, which may not be acceptable to the court anyway, be sure you have the basics covered. Exemptions are designed to make sure that you can move forward after bankruptcy with the basic things you need.
- Consider the benefits of both joint and individual bankruptcy. The choice to file a joint bankruptcy with a spouse is a very important one. It automatically doubles some of your exemptions but also puts more of your dual assets at risk. Talk to your attorney about weighing the benefits of an individual versus a joint bankruptcy.
If you have questions about filing bankruptcy, contact the Amerio Law Firm in Sacramento. We are here to help you solve your financial problems and issues and get a fresh start through the power of bankruptcy protection.