Property in Bankruptcy – Permitted Bankruptcy Exemptions
Many of our clients worried about the possible loss of their home as they considered filing for bankruptcy. Though there have been a few situations where a debtor lost his/her home, keep in mind that bankruptcy is not designed to put you out on the street. You lose no property in chapter 13. In chapter 7, you select property you are eligible to keep from a list of permitted exemptions:
Equity in your Home – In chapter 7 bankruptcy, whether or not you will lose your house depends on the amount of equity you have in the property and the amount of any homestead exemption (which varies state-to-state) to which you are entitled. If the total amount of debt against your house is less than the market value, you may lose your house unless a homestead exemption entitles you to all or most of the equity. In Texas, this exemption allows you to keep your home regardless of the equity you have in it (with very few exceptions). If you are behind on your mortgage payments, you will almost certainly lose your house if you file a chapter 7 bankruptcy. Your mortgage lender will ask the bankruptcy court to lift the automatic stay to begin or resume foreclosure proceedings. In a chapter 13 bankruptcy, you will not lose your house if you immediately resume making the regular payments and repay your missed mortgage payments through your plan. If you are current on your mortgage payments, you will not lose your house if you file for chapter 13 bankruptcy, as long as you continue to make your mortgage payments.
Renting – If you are current on your rent payments and file for bankruptcy, it’s unlikely your landlord would receive bankruptcy notice. But if you are behind on your rent, there’s a good chance that your landlord will begin eviction proceedings.
Insurance – You usually are allowed to retain the cash value of your policies, Retirement plans. Pensions which qualify under the Employee Retirement Income Security Act (ERISA), and many other retirement benefits are fully protected in bankruptcy.
Personal Property – You’ll be able to keep most household goods, furniture, furnishings, clothing (other than furs), appliances, books and musical instruments.
Public Benefits – All public benefits, such as welfare, Social Security and unemployment insurance, are fully protected.
Tools used on your Job – You’ll probably be able to keep up to several thousand dollars’ worth of the tools used in your trade or profession.
Wages – In most states, you can protect at least 75% of earned but unpaid wages.
Have more questions about bankruptcy exemptions? Call the DFW Bankruptcy attorney, Andrew Nichols today!
Law Firm of Dallas Bankruptcy Attorney Andrew B. Nichols
Helping clients with creditor lawsuits, debt relief options and bankruptcy.
Call (214) 999-1313
Serving clients in Dallas, Plano, Garland, Allen,Richardson, Frisco TX areas.
– DFW area Bankruptcy Attorney servicing Dallas , Fort Worth, Richardson, Garland, Plano, TX and the surrounding areas. Chapter 7 Bankruptcy Attorney / Chapter 13 Bankruptcy Attorney / Debt Relief Attorney