Can I keep my house or car if I file bankruptcy?

by Bankruptcy Law Network (BLN)

August 7, 2009

Any person considering bankruptcy always wants to know what is going to happen to their “stuff”.  This is an area of great concern and stress for anyone with financial difficulties.  Unfortunately, there is usually not a blanket answer to this question.

Each state has different laws relating to what a person may keep as their property when they file a bankruptcy.  To make things even more complicated, the Bankruptcy Code also has its own set of rules that may allow someone to keep their property from their creditors that is completely different than their State laws.

When a person files a Chapter 7 bankruptcy, a trustee is appointed to collect all of the person’s property that they are not authorized to keep under the law of their State or the Bankruptcy Code.  The biggest mistake a person can make is to attempt to transfer or sell property before filing in an attempt to “hide” or “save” it from their creditors.  These types of actions could result in the loss of a discharge or the loss of property that otherwise would have been “exempt” from creditors.

The best advise I could give someone considering bankruptcy, is to meet with an experienced bankruptcy attorney to discuss what options are available, to make plans concerning their property.

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Last modified: August 7, 2009