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Will I lose all my assets when filing for Chapter 7 bankruptcy?

Chapter 7 bankruptcy is a very popular choice for those dealing with financial issues for many reasons. First, it offers debtors the chance to be completely free from all their debts. Second, the entire process can be over within a few months.

While Chapter 7 bankruptcy is a very favorable option, it does have some downsides. Since it is primarily concerned with the liquidation of assets to pay off debts, it means that bankruptcy filers are required to part with significant assets as part of the process. Many prospective filers become worried about being left with no assets after the bankruptcy is completed. This will not be the case since there are federal bankruptcy exemptions that apply to basic assets. The following are the assets you will be able to keep when filing for Chapter 7 bankruptcy.

Homestead exemptions

Many people have the majority of their assets stored in their homes. Unfortunately, most homeowners will have to sell their home in Chapter 7 bankruptcy, since the federal homestead exemption is limited to around $20,000.

Exemptions for your car

Your car is likely essential for living your everyday life. This is why you will be able to keep a vehicle up to a certain value, set federally to $3,225 in 2010. This limit can be doubled if you are filing for bankruptcy as a couple.

Personal property

Many exemptions apply to personal property. You will be able to keep a reasonable amount of clothing and possessions that are necessary to live your life.

If you are concerned about losing assets in a Chapter 7 bankruptcy, you should consider all bankruptcy options available to you.

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