Figuring out if you should NOT file for bankruptcy.
A Chapter 7 Bankruptcy has the power to recover
- Money or property that you have given as “gifts to others”;
- Repayments of loans from friends or family
- Payments of debts to preferred creditors just before bankruptcy
- Tuition payments for grown children
- Transfers to trusts
- Money you have received from an estate
- Your parents’ home if they added your name on the deed
- Your parents’ bank account if you are a joint owner
- Your parents’s assets if you are a beneficiary of a trust
- Assets you have placed in a trust
- Assets you own in another country
- Valuables in a safe deposit box
- Any inheritance if the individual has already passed away, even if you have not received it yet
- Any inheritance you receive within six months after you file for bankruptcy
- Any assets you receive under a divorce judgment within six months after you file for bankruptcy.
Not all assets are completely exempt from creditors in bankruptcy
- There is a ceiling on home equity you can keep
- There is a ceiling on accident proceeds you can keep.
- There is a ceiling on car equity that is exempt
- There is a ceiling on cash, financial accounts and tax refunds.
It is not always necessary to file for bankruptcy.
If your only income is exempt from creditors (workers compensation, disability insurance, social security, pension), your income cannot be taken by garnishment or marshal’s execution.
Nevertheless, there are sometimes good reasons to file for bankruptcy, even if your income is safe:
- Anticipated inheritance more than six month from now
- Stopping collection calls, letters and lawsuits
- Desire for Calm in your life
- You can afford to pay your current bills, if only you did not have that old debt
- You expect to have increased income in the future
- You are planning on getting married and, even if your spouse does not want to file bankruptcy, your combined income will be too high for you to qualify for bankruptcy after you are married.
No two situations are exactly alike. Paul Hollender has spent 43 years helping people deal with financial stress. He will help you find a solution that is right for you, and guide you through the process to avoid hidden traps and risks.