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The Myth of Losing Everything in Bankruptcy: What You Need to Know

Are you drowning in debt and considering filing for bankruptcy? The thought of losing everything you own can be terrifying, but the reality is that bankruptcy doesn't have to mean financial ruin. In fact, it can be a fresh start towards a better financial future. In this blog post, we'll debunk the myth of losing everything in bankruptcy and provide you with practical tips to help you navigate the process.

1. Understand the Different Types of Bankruptcy

There are two main types of bankruptcy for individuals: Chapter 7 and Chapter 13. Chapter 7 is a liquidation bankruptcy, which means that your non-exempt assets will be sold to pay off your creditors. However, most people who file for Chapter 7 are able to keep their property through state and federal exemptions. Chapter 13, on the other hand, is a reorganization bankruptcy that allows you to keep your property and pay off your debts over a period of 3-5 years. Understanding the differences between these two types of bankruptcy can help you make an informed decision about which one is right for you.

2. Know Your Exemptions

As mentioned earlier, exemptions can help you keep your property in bankruptcy. Each state has its own set of exemptions, and you may also be able to use federal exemptions in some cases. Common exemptions include your home, car, personal property, retirement accounts, and tools of your trade. Knowing your exemptions and how to use them can help you protect your assets in bankruptcy.

3. Hire a Bankruptcy Attorney

Navigating the bankruptcy process on your own can be overwhelming and confusing. Hiring an experienced bankruptcy attorney can help you avoid costly mistakes and ensure that your rights are protected. A bankruptcy attorney can also help you understand your options and guide you through the process from start to finish.

If you're considering bankruptcy, reach out to the Licata Bankruptcy Firm for a free consultation. Our experienced attorneys can help you understand your options and guide you towards a better financial future.