Bankruptcy Protects Your Future Property, Even If Your Property Isn’t At Risk Today

27 Sep Bankruptcy Protects Your Future Property, Even If Your Property Isn’t At Risk Today

Susanne Robicsek 2010

Bankruptcy might be something to consider, even if you don’t own any property. But people are often surprised to learn that even if they don’t file, their property may be protected (exempt) under their state’s exemption laws. Debtors have to be careful to follow the rules required to protect themselves from their creditors and timely file forms to claim protected property, but if they do there may be little judgment creditors can do to the debtor for non-payment: today.* (*what follows is important)

In North Carolina, bankruptcy debtors that have lived in NC for more than two years get the same protection under the NC state exemption laws from their judgment creditors outside of bankruptcy.

But without filing bankruptcy, a judgment can stay alive for up to twenty (20) years in NC. So a judgment creditor might not bother you now, but they may just wait until the debtor accumulates more than their allowed exemption and then take the property.

As home equity is paid down, as cars are paid off, as savings grow, as property is inherited, there is more risk that a judgment creditor will eventually find property they can take to satisfy their debt.

*Many creditors don’t take a judgment to collect today. They take judgments to collect tomorrow.

So even if there is nothing a creditor can do today to collect their debt today, filing cuts off future rights of the creditor to take property as you get back on your feet. Bankruptcy isn’t just to protect property you own right now, but it protects your property in the future.

It should be mentioned that North Carolina is not a wage garnishment state, and people living in states that allow garnishment of wages may have different considerations.

see also:

Can A Creditor Garnish My Wages AND Take My Money In The Bank? By Karen Oakes, Southern Oregon Bankruptcy Attorney

Bankruptcy, exemptions and a fresh start By Cathy Moran, California Bankruptcy Lawyer

NC Bankruptcy Debtors To Get Higher Home Equity Protection By Susanne Robicsek, Charlotte North Carolina Bankruptcy Attorney

Should You File Bankruptcy If You Have No Assets? By Susanne Robicsek, Charlotte North Carolina Bankruptcy Attorney

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Concentrating in Consumer Bankruptcy Law since 1988; Wake Forest Law School JD 1987 Law Office of Susanne M. Robicsek since 1993, Law Clerk to Judge Rufus Reynolds, US Bankruptcy Judge for Middle District of NC; Burns Price & Arneke, PA, David Badger and Associates, PA.

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