Many people who would be helped by bankruptcy may avoid it out of fear of losing all of their property, including:
- Car, truck or motorcycle
- Retirement account
- Personal items
This worry usually is unfounded and can lead to bad results. If you put off bankruptcy, creditors can get judgments against you which can lead to bank account levies, wage garnishment or liens against your house.
Most people can keep everything they own, including their house and car, because of “exemptions.” Basically, exemptions are lists of things you can keep from creditors in bankruptcy. Different exemptions are available under state and federal law. Each state has different exemption laws. See Protecting Your Assets in Bankruptcy.
For example, Connecticut exemptions allow each spouse on title to a house to keep $75,000 of equity in the house. If your house is worth $400,000 and has a mortgage of $300,000, the equity is $100,000. If two spouses are on title, each has a $75,000 exemption (even if only one files), entitling them to keep the house. In New York, the house exemption varies by county but can be as high as $150,000 per spouse on title.
The exemption for cars varies slightly among Connecticut, New York and Federal exemptions, but car equity of at least $3,500 can be protected. Again, equity means the difference between what the car is worth and the outstanding balance on the car loan. A car worth $20,000 subject to a $17,000 loan, could be fully protected.
Qualified retirement accounts and pensions are generally fully exempt from creditors.
Household furniture and apparel are generally fully exempt. In addition, there are particular exemptions for tools of the trade and jewelry. “Wildcard” exemptions can be used to cover anything not otherwise exempt. The amount of the wildcard exemption varies among Connecticut, New York and Federal exemptions.
To Better Understand What You Can Keep, Contact Us For A Free Initial Consultation
Filing bankruptcy does NOT let you keep all of your property for free. If there is a lien against the property, say a mortgage on your house or a lien against your car title for a car loan, the lender still needs to be paid. If you want to keep the house or car and you are behind on your monthly payments, you would have to catch up on the payments before filing bankruptcy in Chapter 7. If you cannot catch up before filing, Chapter 13 might be a better option for you.
Balbus Law Firm is committed to helping you protect your assets. We take the time to understand your individual circumstances and provide you with the best possible options taking into consideration all of the variables involved in the different types of bankruptcy filings.
To discuss what you can keep and any other aspect of filing bankruptcy in a free initial consultation, call 203-286-4121 or e-mail us.
Balbus Law Firm is a debt relief agency. We help people and businesses in New York and Connecticut file for bankruptcy relief under the Bankruptcy Code.
We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.