Chapter 7 Bankruptcy

In a bankruptcy case under Chapter 7, a lawyer will file a petition on the client’s behalf asking the court to eliminate your debts. There is no monthly payment plan to creditors. If you are behind on the payments on a mortgage or car loan, a Chapter 7 case probably will not be the right choice for you. That is because Chapter 7 bankruptcies do not eliminate the right of mortgage holders or car loan creditors to take your property to cover your debt if you are behind on your debt at the time you file.

In most cases, if your lawyer does his or her job correctly before you file, all of your property will be protected. Your lawyer can protect your property in a variety of ways. You may have already read about asset protection planning but there is also another common method used as well.

This additional property protection method is use “exemptions”. Exemptions are part of federal and sometimes state law. Exemptions are values or dollar amounts which apply to homes, cars, personal property like jewelry or tools, retirement accounts and other property. The exemption declares a dollar amount up to which a particular type of property can be protected.

WARNING! Protecting property through asset protection planning and exemptions can be very complicated. Many lawyers don’t understand how the law operates. Call O.W.D Law Offices and we can review your situation and show you how to protect your property.