Bankruptcy is a legal process that wipes out unsecured debts. Unsecured debts are those that you owe without any sort of collateral. In fact, under bankruptcy, certain types of property cannot be sold to pay off your debts. Things like clothes and furniture from your house cannot be sold, so they will be left unpaid. A bankruptcy filing is a public record, so creditors can track your credit report to determine your financial health.
When you have an unsecured debt, you cannot repay it with other types of property, like your home or car. You will need to have purchased the unsecured debt within the last year before you file for bankruptcy. This article covers the differences between unsecured debt and bankruptcy. It also explains when bankruptcy is an option. Listed below are some of the ways to pay off your debts in bankruptcy. Unsecured debts are the most difficult to discharge.
Bankruptcy cannot eliminate child support or alimony. The money left over is distributed to unsecured creditors. Alimony is a special case. If you have paid child support or alimony, you will not be able to wipe out these debts. These are public policy reasons that you cannot eliminate these debts through bankruptcy. In addition, bankruptcy will affect your credit rating, so it’s important to know the laws regarding bankruptcy.
What is a non-exempt asset in bankruptcy? Non-exempt property is essentially anything that you cannot liquidate in bankruptcy. This includes things like your car. Most states have an exemption for personal property. Others have a “wild card” exemption that covers anything, including jewelry. Each state has different laws and exemption amounts. Keeping track of how much you spend on non-exempt assets is essential for making wise decisions regarding non-exempt property.
If you have assets that fall into the category of non-exempt, your attorney can advise you on the best way to protect them. As long as you haven’t declared bankruptcy yet, you should contact a bankruptcy attorney to get the full picture. An attorney can explain what the exemptions mean and which assets are exempt. Depending on your circumstances, a bankruptcy attorney may advise you to liquidate some assets before filing for bankruptcy.