If you are considering working with a Chapter 7 attorney and filing bankruptcy, you need to consider all of your options and ensure that your family is protected. This is an excellent way to get a clean slate and start fresh without a mountain of debt. For families that are simply in over their head, this can be the best way to move forward and get ahead of your bills instead of always feeling that you are behind while struggling to catch up. This type of bankruptcy provides the option of wiping away your debts instead of making payments.
Since you can wipe away your debts, all of your assets are also on the chopping block. If you have a lot of equity in your home (s), cars, boats, etc. they can all be claimed and sold as a way to give your creditors some money. This is especially true on any assets that are collateralized. For example, if you own a boat with a loan on it, the boat is probably collateral for that loan and the bank has the right to reposes it. There are, however, ways that you can protect yourself and your family.
The homestead laws have been established to help people that are going through a difficult time financially. They are designed to ensure that people do not end up homeless. The laws vary from state to state but in California anywhere from $75,000 to $175,000 can be claimed as part of the homestead provisions. Everyone qualifies for the lower amount of $75,000 with higher amounts allowed incrementally based on income and age. In order to qualify for $175,000, you have to be 65 or older or disabled. What these laws allow people to do is to claim that dollar amount of equity is protected from creditors in a Chapter 7 or other legal action. As a Chapter 7 attorney, we can ensure that the form is filed correctly.
When the bankruptcy judge looks at the assets that you have that can be sold to pay debts, they cannot include equity that is covered by the Homestead Act. In many cases, this prevents a home from being sold because the equity above the protected amount is insignificant and wouldn’t be able to satisfy the outstanding debt. In order to qualify for this protection, you must complete a homestead declaration and file it in the county where you live. If it is not filed correctly, your home may not be safe. As a Chapter 7 attorney, we can help with this process to ensure that you and your family are protected and able to stay in the family home.
As a lawyer, we can also help to protect some of your other assets. For example, we can make a case that you need to keep a car so that you can drive to and from work every day, important for ensure that your financial problems to do not escalate even further. During your consultation, we will review your assets and debts than create a strategy for each one. To file your Chapter 7, give us a call today.
