Your assets can include property and possessions that you have sold or given away before filing bankruptcy.
Property and possessions that you have a shared interest in can be the kind you don’t think of as yours for bankruptcy purposes.
Inheritances and life insurance proceeds have a special rule when it comes to the timing of your bankruptcy filing.
Most pensions and other retirement funds are “exempt”–completely protected when you file bankruptcy. But there’s an exemption cap for IRAs.
The federal exemptions are nudging up about 3%. But that only matters if you are allowed to use them, and are higher than your state ones.
Most of the time everything you own is exempt, meaning it’s protected in a Chapter 7 bankruptcy. If not, Chapter 13 can usually protect it.
If you are thinking about filing bankruptcy and have a tax refund coming, you can usually keep your refund if you get advice about doing so.
If your possessions are not fully protected by the available property exemptions under Chapter 7, Chapter 13 can save the day.
Most people can file Chapter 7 and not lose anything because everything they own is “exempt.” But what if something of yours isn’t?
Financial wisdom says you should set aside money for 3-to-6 months of living expenses. You can do this even before filing bankruptcy.
Bankruptcy focuses (for most purposes) on assets you own as of the moment of filing. So consider using up unprotected assets before then.
One strategy to prevent the loss of asset value in bankruptcy is through very cautious conversion of unprotected assets into protected ones.
By filing your bankruptcy after applying appropriate asset management strategies, you can save your assets and pay the right creditors.
Chapter 13 can be the best way to protect assets. All the more so if you are led there for other reasons, especially for “priority” debts.
You don’t necessarily need Chapter 13 to protect an exposed asset. The bankruptcy trustee in Chapter 7 is usually willing to do a deal.