For some, bankruptcy is the best way of receiving relief for financial obligations that you are unable to afford. A person considering bankruptcy will want to research all possible avenues when it comes to figuring out how they will manage their current financial situation. It is common for people to have a number of questions surrounding bankruptcy. Many worry that they will lose all that they value and hold dear if they choose to file for Chapter 7 or Chapter 13 bankruptcy. The reality is, bankruptcy is not as scary as people commonly believe. A bankruptcy lawyer Memphis, TN trusts can provide you with the legal counsel you require when it comes to initiating bankruptcy proceedings and advise you regarding your specific situation and help you make decisions around the best way to move forward.
Exempt Versus Non-Exempt Items
Determining the assets you get to keep if you file for bankruptcy will likely be weighing heavily on your mind throughout the process. You will determine with your attorney, the property you are hoping to retain ownership of after bankruptcy. Under bankruptcy law, you can claim certain assets or personal property that is essential and protected from creditors. This is called, exempt property. Exempt property can include:
- 401K Retirement
- Certain Personal Items: Jewelry and clothing (up to a certain value)
- Car (If you require it to get to and from work)
- Homestead exemptions protect a portion of the equity in your home
Non-Exempt items may be used to pay off your creditors and usually include:
- Second Vehicles
- Other property you may own
- Valuables or novelty collections
- Any money that is tied up in investments
The purpose of allowing exemptions is so that a person doesn’t leave a bankruptcy proceeding with nothing.
341 Meeting/Meeting of the Creditors
One of the final steps in a bankruptcy process involves a meeting with your debtors, known as a 341 meeting. The court will determine the date for this meeting within 3-6 weeks of your bankruptcy filing. At this meeting, you and your legal representation will attend to answer any questions that your creditors may have. This is beneficial because you are under oath during the 341 meeting. Prior to this meeting, the trustee that has been appointed to your case will make sure that they have everything in place regarding your bankruptcy. There are a number of documents that they will require prior to the meeting, which will include: Mortgage/loan documents, titles and deeds for property you own, etc. Your attorney will be able to make sure that all the required information has been gathered and submitted to the trustee prior to the 341 meeting. These meetings may seem daunting, but are usually fairly brief. Your attorney will be by your side throughout the process to ensure that everything goes accordingly.
When bills keep piling up, and it feels as though you will never be able to get on top of them, you may want to consider bankruptcy. This is especially true if you have spent a considerable amount beyond your means.
Thank you to our friends and contributors at Darrell Castle & Associates, PLLC for their insight into bankruptcy.