It’s possible to protect your assets during bankruptcy with knowledge of the laws and wise strategy. Attorneys can help clients choose between Chapter 13 and Chapter 7 bankruptcy, and work with them on planning their case in advance, including claiming exemptions. Here is everything you should know about protecting your assets during this time.
Asset Protection in Bankruptcy
Advance Planning for Asset Protection
Bankruptcy attorneys offer strategies for clients to maximize their exemptions and cover nonexempt assets. If you purchase a life insurance policy, make mortgage payments, and pay down non-dischargeable debts, such as student loans and child support, you can reduce liquid assets before filing a bankruptcy petition. This can help bring remaining assets down to the exemption limits.
If you time the purchase of a car or other necessities for personal or family use before filing, it can protect those assets after starting the bankruptcy process. Payments for three to five years under a Chapter 13 plan enable debtors to cure their defaults on assets including houses and cars. The plan protects them against actions by creditors while other assets are covered under exemptions.
By claiming state exemptions, you’ll protect property including household goods and furnishings, motor vehicles, retirement accounts, and Social Security payments. A trustee of a Chapter 7 bankruptcy has the power to liquidate, or sell, non-exempt assets and distribute sale proceeds to creditors. If you plan a year or more before filing, you can eliminate non-exempt assets.
The attorneys at The Gil Law Firm in Dothan, AL, have 18 years of experience helping Alabama, Georgia, and Florida residents protect their assets when they file bankruptcy. These legal professionals combine skill and compassion to guide clients through the complex process of obtaining debt relief. Call (334) 673-0100 to schedule a confidential consultation appointment. Learn more about the firm online and follow them on Twitter for news.