Perhaps the biggest misconception regarding filing bankruptcy is the notion that upon filing, you will lose all your property.
This couldn't be further from the truth.
Filing a Chapter 7 bankruptcy does not automatically result in the loss of all your property.
When you file for bankruptcy, a bankruptcy estate is created. All your property is technically included in this estate.
In a Chapter 7 bankruptcy, it is the bankruptcy trustee's responsibility to analyze this estate to see if any of the property can be liquidated.
State & Federal Exemption Laws for Bankruptcy
However, there are state and federal exemption laws that allow those who file bankruptcy to protect the value in their property ahead of time. These laws cover value in property that otherwise might be unprotected.
Furthermore, if you continue to make timely payments on your house and car, you will not lose those properties either.
Prior to the filing of the case, most of the property is protected from either state exemptions, federal exemptions, or both, depending on the state.
If you are considering filing for bankruptcy, you should enlist the help of a qualified Chicago bankruptcy attorney like Joseph P. Doyle.
Schedule an appointment with him to discuss your bankruptcy options today!