There is a misconception that people feel if you own a home that you can’t file a Chapter 7 and that you must file a Chapter 13 bankruptcy; this is simply not true according to a Plattville bankruptcy attorney. Most people who file for bankruptcy are under the misconception that because they own a home they have to do a Chapter 13 debt reorganization. In reality most people who file a Chapter 7 do keep their house and vehicles as well as all of their other miscellaneous property while getting out of debt.
The role of your bankruptcy lawyer is to make sure that your property is going to be protected when you file for Chapter 7 Fresh Start Bankruptcy. If there’s going to be a case where you have a piece of property that is above and beyond the exemption amount and you feel it might be taken by the trustee then you have to advise your client of that potentiality.
The client can make several decisions with regard to property. The client can keep the property and pay off the trustee’s interest in the property; the client can let the property go in exchange for the fresh start; lastly, the client can take the chance that although it’s a potential asset involved here, take the chance that the trustee will not wish to administer that asset.
In my office if I have someone who has an asset that is above and beyond the exemption amount I will have him or her sign a potential asset acknowledgement form. I want my clients to know that there is a chance that a trustee might seek an interest in specific property. I do not want my clients to come back later and say, “You didn’t tell me that the trustee was going to want to take my house. You didn’t tell me that the trustee was going to want to take my car or my bank account.” By making sure that my client is aware of the possibility I have done my job as a competent Chapter 7 bankruptcy attorney.
If I feel that the amount of equity in a property is extensive then I will likely not recommend that my client’s file a Chapter 7 bankruptcy. In those cases I will recommend that my clients file a Chapter 13 bankruptcy case where they keep all of their property and repay all or a portion of their debt over time. Thus, in either case, Chapter 7 or Chapter 13, I can assure my clients that in 99 percent of the cases that they’re going to be able to keep their property. In a Chapter 7 the clients just simply have to continue to make their regular payments on their mortgage and their car. In a Chapter 13 the clients have to make their regular mortgage payment once again but an arrearage or any car payment financing would be paid through the bankruptcy Chapter 13 reorganization.
The Chapter 13 reorganization is a monthly payment that is paid to a Chapter 13 trustee who administers a portion of the amount per month to the different creditors based on the bankruptcy code hierarchy. Mortgage arrears and child support arrears are paid primarily first, unsecured creditors such as credit cards, medical bills, personal loans and debts for other types of services are paid last. So you do not have to worry when you’re filing either Chapter of the bankruptcy code that you’re going to lose property. If you have a skilled bankruptcy attorney you’re going to be aware of the notion that property could be taken in a Chapter 7 or, more importantly, property can be protected by the filing of a Chapter 13 bankruptcy. You will not get that advice from a cheap bankruptcy lawyer.
For these reasons you want to make sure that you hire a local bankruptcy attorney who has the requisite knowledge and skill and experience to handle both Chapter 7 and Chapter 13 bankruptcy cases under the United States Bankruptcy Code.