If you are considering filing for Chapter 7 bankruptcy in Utah, you may have concerns about what property you can keep after filing.
Rest assured, some of your property is exempt. To help you decide if Chapter 7 bankruptcy is right for you, you should first know the details about this type of bankruptcy and which property you get to keep in the process.
What is Chapter 7 bankruptcy?
Chapter 7 bankruptcy is also known as “liquidation bankruptcy.” While this name may sound scary and invoke images of a total loss of possessions, in this case, liquidation simply means that you must sell some of your luxury assets to pay off a portion of your debt. Examples of luxury items that you may have to liquidate include:
- Second vehicles
- Vacation homes
- Bank accounts
- Musical instruments that are not needed for a profession
Which property is exempt if I file for Chapter 7 bankruptcy?
When you are already struggling with debt, the last thing you need is to have all of your assets liquidated. Fortunately, you can keep up to $43,300 of your home’s equity. Similarly, you can keep up to $5,000 in equity on a second property. Several categories of personal property may be exempt to a certain dollar amount, including:
- Primary vehicles
- Appliances and furniture
- Pensions, retirement plans and education savings plans
- Veteran’s benefits
- Workers’ compensation and unemployment benefits
Chapter 7 bankruptcy is a tool designed to help you recover from the burden of debt. While some asset liquidation is necessary, you are still allowed to keep many of your possessions after a Chapter 7 bankruptcy.