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Six Assets You Could Lose if You File for Chapter 7 Bankruptcy
If you struggle with debt, filing for Chapter 7 bankruptcy may be an option. However, making the decision to declare bankruptcy can be challenging, considering that there are certain assets you could lose after filing.
To help you make an informed decision, you need to understand which assets are protected and which assets you could lose if you file for bankruptcy under Chapter 7. Our Oakland Chapter 7 bankruptcy lawyer can help you review your situation and explain whether or not filing for bankruptcy is a good financial decision in your case.
Chapter 7 Bankruptcy and Exemptions
Filing for Chapter 7 bankruptcy in California is a challenging decision, but exemptions are available to help protect your assets. Before you start a Chapter 7 bankruptcy case, consult with a qualified bankruptcy lawyer to discuss your options, exemptions, and the bankruptcy process in California. According to the official website of the Judicial Branch of California, assets that are not exempt can be sold by the court to pay creditors.
An attorney can help you understand which exemptions apply to your specific situation and guide you through the bankruptcy process, so you can come out the other side as quickly and painlessly as possible.
What Assets Can You Lose if You File for Chapter 7 Bankruptcy?
If you choose to file for Chapter 7 bankruptcy, you are at risk of losing some of your assets:
- Vacation and Second Homes
If you have a vacation or second home, it is possible that you could lose it when you file for Chapter 7 bankruptcy. California’s homestead exemption cannot be used for a vacation or second home. Since your vacation or second home is not your primary residence, the trustee could sell it and use the proceeds to pay off creditors.
- Second and Subsequent Vehicles
If you own more than one vehicle, the trustee may ask you to surrender them both. However, you may be able to keep one vehicle if it is under the allowed exemption amount.
- Recreational Vehicles
A recreational vehicle, such as an RV or a boat, may be considered a luxury item. Therefore, it could be seized by the trustee as part of the bankruptcy estate. If you cannot exempt the full value of your recreational vehicle, you may need to give it up.
- Land and Investment Real Estate
If you own land or investment real estate, it may not be protected under the California homestead exemption. The bankruptcy trustee could sell the property and use the proceeds to pay off creditors.
- Jewelry
Most jewelry is not exempt from seizure in bankruptcy. Therefore, if you own valuable jewelry, such as a diamond necklace or a Rolex watch, the trustee may take it to pay off your debts.
- Stocks, Bonds, and Other Investments
If you own stocks, bonds, or other investments, the trustee will likely sell them and use the proceeds to pay off your creditors. However, some retirement accounts, such as 401(k)s and IRAs, are protected from seizure in bankruptcy.
Get Guidance From a Bankruptcy Lawyer
Filing for Chapter 7 bankruptcy can be a difficult decision, but it is essential to understand what assets you may lose beforehand. In California, each asset is subject to different exemption rules, which is why you should consult with a qualified lawyer to help protect your assets. Contact the Law Offices of Melanie Tavare to get knowledgeable guidance. Call 510-255-4646 today.
"Melanie is the best she very responsive and helpful throughout the process everything was taken care of smoothly. If you are thinking of going through bankruptcy she is the best attorney for you. I will forever be grateful having the chance to work with her. She is very honest too."
Sandhya.
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"What I liked about working with Melanie was how prompt and easy to work with she was. She made the process clear and understandable with as little stress as possible. I would work with her again and recommend her to others."