Many people work hard to build a comfortable life saving and live within their means only to have sudden unanticipated events shake the financial foundation upon which they have built their life. Families may spend a lifetime acquiring their possessions. Sometimes sudden unexpected events including an economic downturn, unanticipated job loss, serious health issue or other adverse event can overwhelm and financially devastate a family. You may hesitate to seek bankruptcy protection because you believe that you will not be able to keep your stuff. However, a substantial number of our clients keep most if not all of their possessions when they seek bankruptcy relief.
There are two principal types of consumer bankruptcy – Chapter 7 and Chapter 13. A Chapter 13 bankruptcy involves making payments toward obligations over a 3- or 5-year period and receiving a discharge of remaining unsecured balances at the end of the payment plan. If you successfully complete the repayment plan under a Chapter 13 bankruptcy, you will keep your stuff even after receiving a bankruptcy discharge. A Chapter 7 bankruptcy, also known as “liquidation bankruptcy”, is more commonly what people think of as a bankruptcy where they surrender their possessions.
While in theory a bankruptcy trustee who oversees your bankruptcy may be able to sale assets and distribute proceeds to creditors, this is reasonably rare in Chapter 7 bankruptcy proceedings. The only assets that are subject to liquidation and distribution are “non-exempt” assets. Those that file bankruptcy in most states must choose between the federal and state exemption schedules, but Arizona follows another approach permitting use of the Arizona exemption schedule and use of applicable amounts in the federal non-bankruptcy exemptions. Generally, a married couple will file bankruptcy jointly and frequently both spouses can claim the full amount of the exemptions doubling their value. The scope of the exemption system is extensive so that skillful use of the exemption process can mean that you keep your stuff – all your possessions.
Some of the most utilized exemptions include the following:
While this is only a partial list, it provides some idea of the scope, variety and value of items that may be exempt from bankruptcy proceedings. An experienced Arizona bankruptcy attorney can help you maximize your use of the bankruptcy exemptions system so that you keep your stuff. While you cannot simply give items away or engage in sham sales, there are valid ways to convert non-exempt assets to exempt assets subject to bankruptcy protection.
Our Arizona bankruptcy lawyers are committed to helping debtors protect their assets and keep their stuff when filing bankruptcy. We believe that the bankruptcy process is more than simply filing for bankruptcy protection; it is about effective asset management and asset protection. Stone Rose Law offers customized bankruptcy solutions tailored to your individual needs and designed to help you protect your assets and keep your property so contact us today at 480-498-8998 today.