One of the most difficult aspects of filing for personal bankruptcy is the fear of losing one’s hard-earned and highly personal assets. Many people in Maryland put off filing for consumer bankruptcy for fear that they will be required to sell their belongings. In reality, however, most people are able to retain the majority of their belongings, and can also look forward to a fresh financial start once the bankruptcy process has concluded.
Each state has its own list of bankruptcy exemptions. These are the assets, or the portion of an asset, that is exempt from the bankruptcy process. For example, there are guidelines under which individuals can keep their personal vehicles. Another exemption can help certain homeowners retain their family home, if equity requirements are met and the borrower is able to continue making payments on the mortgage.
When it comes to items of personal property, a trustee will be assigned to make decisions on what, if anything, should be sold to repay creditors. For most people, the items that are held most dear are not the ones that would bring an obvious profit,and individuals are able to retain these belongings. In addition, guidelines are given as to which types of personal property are exempt from the bankruptcy process.
When considering consumer bankruptcy options, Maryland residents should not become distracted by fears of losing their personal property. It is possible to sit down with a bankruptcy attorney and address these fears, which should go a long way toward assuring most individuals that their cherished possessions will be retained throughout the process. In the end, the financial freedom that comes with a successful bankruptcy is worth going through the process itself.
Source: Investopedia, “File Chapter 7 Bankruptcy”, Daniel Kurt, Oct. 1, 2014
