One of the most often asked questions in a Chapter 7 bankruptcy is “what will happen to my property?” The answer depends on whether the property is “secured” or “unsecured.”
Unsecured property is property that is not attached as collateral for a loan. For example, if you use your credit card to purchase a TV there is not a document that states that you pledge the TV as collateral to payoff the credit card at a later date. For this property you will have to see if an exemption applies. Each state has a list of exempted property which cannot be seized and sold. The list is rather long and often most of your property can be protected with an exemption. It is important that you seek an expereinced bankruptcy attorney who will be familiar with the exemptions and maximize them to protect as much of your property as possible.
Secured property is property that is attached as collateral for a loan. For most families this is a car or home. If you are behind on your payments the creditor may ask the Bankruptcy Court to lift the automatic stay and seize the property for sale to pay off the debt. If you are current on your payments then you can hold onto the property and continue making your payments as before. If however you have built up considerable equity in the property, the trustee may try to seize the item for sale to pay your creditors.
Call us to discuss how to protect as much of your property as possible. We can be reached at (215) 348-4416.
