During a Chapter 7 bankruptcy you'll be able to get rid of most your debts. Nevertheless, you might end up being forced to liquidate (Sell) some personal property to repay your creditors. Your creditors will then be compensated from the sale of your assets. However, any compensation which the creditors receive will likely be minimal.
Exemption Protection
At first, it appears alarming that, when filling for your Chapter 7 Bankruptcy, you might have to sell all of your personal belongings and give that money to the creditors. You shouldn't worry though because filing a Chapter 7, as a consumer, won't make you flat broke as federal bankruptcy laws permit you to keep certain personal property . These items you retain are referred to as bankruptcy exemptions. These bankruptcy exemptions vary among states. As an example, when filing bankruptcy in Nevada, you are eligible to retain your automobile, (Up to a $15,000 value), one fire-arm, your property (as much as $500,000) and a great amount of clothes and furnishings. Also in Nevada, you are allowed to keep a personal and/or professional library. Take note, the fact that you are able to only keep your home when you are up-to-date with your payments.
Most Petitioners Will Lose Little (if any) Property
As stated above, you will find limits to these exemptions. However, the majority of consumers won't have any problems staying within these limits. So, if you're the typical bankruptcy filer who does not possess exotic and/or expensive furniture, chances are that you will never need to sell off any of your personal property should you file a chapter 7 bankruptcy. Therefore, you do not have to worry that when you file for bankruptcy you'll be destitute and have to sleep on the ground and purchase new clothing at Good Will.
