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Chapter 7 bankruptcy accounts for exempt property

| Mar 25, 2019 | Chapter 7 Bankruptcy

When struggling financially, many Oklahoma residents may feel as if they will be trapped forever. Even though assistance options, like bankruptcy, are available, many people choose to forgo such help because they believe only more negative repercussions will occur. However, Chapter 7 bankruptcy can assist many qualifying individuals get back on track.

Though Chapter 7 bankruptcy does involve liquidating assets, it does not mean that the process will result in an applicant losing all of his or her assets in order to pay off debts. In fact, there are stipulations for exempt property that help prevent that exact scenario. For instance, a person may be able to keep a vehicle, clothing, furniture, some home equity, unspent Social Security payments, tools for a trade and assets in retirement accounts.

On a less beneficial side, Chapter 7 does not result in the discharge of all types of outstanding liabilities. For instance, if a person has child support or alimony debt, owes back taxes, accrued debt through illegal actions, or has student loans debt, those liabilities will not be forgiven during the bankruptcy process. Still, that does not mean that taking this debt relief route will not help substantially lessen the amount of owed debt.

It is understandable for Oklahoma residents to have hesitations when it comes to filing for Chapter 7 bankruptcy. After all, they have likely heard a number of myths about how damaging bankruptcy can be. Of course, having the right information about this option could make all the difference in finding out whether it could suit certain circumstances. Instead of holding on to mistaken notions, interested parties may instead want to speak with knowledgeable attorneys about this option.