One of the most common questions I hear as a reputable bankruptcy attorney in Littleton, Aurora, and Centennial is this: Do I have to give up all my possessions if I file for bankruptcy? I hear this question almost every time someone calls me. There are a couple reasons for this belief. We’ll discuss those, and also look at how bankruptcy actually allows you to get a fresh financial start without giving up all that you own.
You Don’t Have to Give Up Everything You Own with Bankruptcy
I just decided to answer your question right away, so I don’t keep you on the edge of your seat. The reality of bankruptcy is that most people keep all of their possessions when they file for Chapter 7 or Chapter 13 bankruptcy in the Denver metro area. This is due to bankruptcy exemptions, which let you keep a lot of your things. For example, there are:
- Retirement Exemptions(which protect your retirement investments)
- Car Exemptions
- Business Exemptions (this is called “tools of the trade”)
- Homestead Exemptions (which protects the equity and contents of your house)
The bankruptcy code includes many exemptions (learn more about bankruptcy exemptions here) which people can use when they file for bankruptcy. There are many rules related to exemptions. For example, if you have equity in an item which exceeds a certain amount, you will not be able to use that exemption. This is why it is wise to work with an honest bankruptcy lawyer if you are interested in filing for bankruptcy. Most of my clients rarely surrender any property to the bankruptcy trustee. This is because I know the bankruptcy code inside and out, and I know which exemptions are the best for your unique financial situation. Sometimes, it is legal to convert property from one exemption category to another. In other cases, there are different ways to value property.
[pullquote align=”center” textalign=”center” width=”90%”]”Giving up all your possessions” is a misconception about bankruptcy.[/pullquote]
Why the Misconception about Giving Up all You Own?
I believe there are three reasons people generally believe they have to give up everything they own when they file for bankruptcy. These are:
1.Guilt and Shame
People “can’t believe they let their finances go.” They think they failed. So, they think the logical conclusion is that they might as well be “punished” and be required to give up all their possessions to “honor” their debts. This mindset is aided by collection agencies who don’t want people to file for bankruptcy and have their debt liquidated.
2.Stigma of Bankruptcy
People are often ashamed they are even considering filing for bankruptcy. They think they are “doing something wrong.” This is a sad perspective. They have bought into the stigma of bankruptcy, because they don’t think people fail in this country. I always point out to my clients the number of successful people and business which have filed for bankruptcy. Bankruptcy is a legal and moral solution to your financial struggles, and it shouldn’t be overlooked.
3.Lack of Education
People don’t always consider bankruptcy because they don’t research it as an option. They hear things like “you have to give up everything you own if you file for bankruptcy,” and they don’t give it a second thought. When you hear something negative about bankruptcy, it is important to consult a professional in order to discover the truth.
Why Working with a Bankruptcy Lawyer is Important
There are many complex laws in the bankruptcy code related to exempt assets. A leading bankruptcy attorney is important in your bankruptcy case, because they know the best exemptions to use to get you the best fresh start possible. My clients’ cases go smoother, and they are able to discharge more debt than if they had filed on their own. Don’t try to decipher the bankruptcy code on your own. Contact me for a free consultation to discuss your financial situation and how bankruptcy can provide relief.
If you bought into the lie that you “have to give up all my possessions” if you file for bankruptcy, be informed. Call now to request your free consultation meeting with Barry Arrington, a Christian bankruptcy attorney at 303-205-7870 or submit the “Get Help Now” form to begin your journey toward financial freedom.
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