Florida residents trying to keep up with overwhelming medical bills, unemployment and unexpected life events often consider bankruptcy for financial relief. However, people often believe they lose everything once they file, so they delay, which can make the situation worse. While the court sells many of your assets and pays creditors, you can keep certain exempt property, which might include your car and home.
According to the U.S. Courts, Chapter 7 of the Bankruptcy Code provides for the liquidation of the nonexempt property before wiping out most of the remaining debt.
Chapter 7 requires that you give up ownership of your property. All property, without exception, becomes part of the bankruptcy estate. This includes all financial assets, real estate, vehicles, personal items and business-related property. Bankruptcy guidelines can help you determine which property you may remove and which property must sell. The court-appointed trustee holds it on behalf of your creditors and negotiates a settlement amount.
Despite the liquidation of assets, the law recognizes you need someplace to live and transportation for work. As a result, you can remove certain assets you need, called exemptions, from the bankruptcy estate. The court allows a broad range of items, such as the following:
- Equipment required for your job
- Home goods and furnishings
- Most retirement accounts
Every bankruptcy case is unique. The court trustee might help you determine which assets stay with the estate for liquidation and which you exempt. Bankruptcy requirements and laws are often complex. It is essential that you understand how the process works and protect the assets you need the most.