Being unable to pay your bills is a serious matter, especially when you want to get the creditors taken care of. Unfortunately, some of life’s circumstances won’t make this possible. If you’re in a position in which you’re unable to pay your bills, you might consider filing for bankruptcy. A Chapter 7 bankruptcy is one of the options that you have.
In a Chapter 7 bankruptcy, you don’t make regular payments to the bankruptcy trustee. Instead, your creditors are only paid if you have non-exempt assets that the court can liquidate to pay them. In most cases, the creditors won’t be paid the full amount they are due. Instead, the money from the liquidated assets are divided among them based on a pre-ordered method used by the court. There are times when a person doesn’t have any non-exempt assets. In these cases, the creditors don’t receive anything.
If you’re considering filing a Chapter 7 bankruptcy, you need to know what’s classified as a non-exempt asset and what’s considered an exempt asset. The exempt assets are the ones that you can keep. Typically, non-exempt assets are things like jewelry, real property that isn’t your primary residence, valuable collections or artwork, investments and similar items.
Because some individuals have assets that hold sentimental value, anyone who’s considering filing for bankruptcy should evaluate how their assets will likely be handled. If you’re in this position, you can determine whether the benefits of filing outweigh having to part with those assets that will be taken by the court and liquidated. Working with someone who can help you find out exactly how you’ll be impacted is beneficial.