It's a common misconception that people who file Chapter 7 bankruptcy lose all of their property. In reality, bankruptcy protection was designed by the U.S. government to help Americans get a fresh financial start. Depending on your financial situation, you may be able to protect your house, car, and other property from creditors while putting an immediate stop to debt collector harassment.
What You Can Keep Under Chapter 7 Bankruptcy
If you're worried about losing your possessions after filing Chapter 7 bankruptcy, you have options. Arkansas residents can choose between state or federal bankruptcy exemptions—or laws that protect certain property. If you're considering filing under Chapter 7, our attorneys can work with you to determine which set of exemptions suits you best.
Depending on how much equity you have in your home, you may be able to keep your home when you file Chapter 7 bankruptcy. Your bankruptcy lawyer can review your mortgage and payments, and help you decide the best plan of action. You can also exempt up to $22,975 in equity in your principal residence, whether it's a home, mobile home, condo, or co-op.
Under Chapter 7 bankruptcy, you can exempt up to $3,675 in motor vehicle equity. If you are still paying on your car, you have three options:
- Reaffirm: You can sign a contract reaffirming your car loan and continue making payments as if the bankruptcy never happened.
- Redeem: You can pay your car lender the current full market value of your vehicle and keep it.
- Surrender: If you can't make payments on your car, you can surrender it to your car lender, and any remaining debt you owe will be discharged.
- Personal Property
Household goods, furniture, clothing, books, animals, crops, and musical instruments valued at $575 or less are protected, up to a total value of $12,250.
- Public Benefits
Your unemployment compensation and workers' compensation benefits are protected from creditors during bankruptcy.
Our Arkansas bankruptcy attorneys know state and federal bankruptcy exemptions, and we'll work with you to help maximize the amount of property you can keep during your Chapter 7 bankruptcy.
Download our Bankruptcy and Your Property PDF now to find out more about how exemptions can help protect your home, vehicles, and even your jewelry during bankruptcy.
Keeping Your Property With Chapter 13 Bankruptcy
Exemptions play an important role in Chapter 13 bankruptcies. Under Chapter 7, a bankruptcy trustee can sell—or liquidate—property that can't be fully exempted. But if you're filing Chapter 13 bankruptcy, you can keep your property by rolling what can't be exempted into your court-ordered payment plan.
Get Started Now
If you're receiving threatening phone calls from creditors or you've been threatened with foreclosure or repossession, we can help. Rainwater, Holt & Sexton is able to serve clients throughout Arkansas, including Little Rock, Fayetteville, Conway, and Hot Springs, and we want to help you get your life back. Call our 24/7 team at (800) 767-4815 or fill out our free contact request form today.
*We are a debt relief agency. We help people file for bankruptcy relief under the bankruptcy code.
*The No Fee Guarantee® does not apply to bankruptcy cases.