After a lot of contemplation, you have decided to file for Chapter 7 bankruptcy. One thing that you are not too clear on is what assets are exempt from bankruptcy.
HowStuffWorks offers some guidance on the matter. Understand how to protect the hard work you put into establishing good financial habits.
With asset protection amid bankruptcy, it is vital that you start sooner rather than later. This way, your protective measures are less likely to fall under scrutiny in court, such as a judge viewing your protective efforts as potentially fraudulent.
Besides researching on your own, work with an experienced professional to see which of your assets have automatic protection during bankruptcy. Commonly protected assets include your car and home, but that depends on state and federal laws.
Formulate an asset protection plan
Assets that are not automatically off the table may require a protection plan. When creating such a plan with a legal professional, make it clear to a judge why you need to retain possession of the asset. If the asset is money, for instance, you may be able to use it to pay off a loan, protecting the equity in a vehicle or property rather than protecting the money itself. You may also draft a protection plan that includes using funds to buy a life insurance policy, pay off student loans or purchase essential household items. No matter how you decide to use the money as part of your protection plan, double-check that the use is legal in Florida and that you adhere to the most current exemption amount.
Bankruptcy may provide you with the mental and financial stress relief you need. To make the most of it, do everything you can to protect your assets.