Bankruptcy & Your Assets: Protecting Your Home & Car

When filing bankruptcy, assets are one thing that most people worry about. In particular, finding out what is going to happen to your home and your car is very important. Here are a few things to consider about what happens to your house and your car during bankruptcy.

Chapter 13 Bankruptcy

During this type of bankruptcy, you are not going to have to lose any of your property. This type of bankruptcy is going to involve coming up with a payment plan in order to repay your creditors. Because of this, the bankruptcy court is not going to pay attention to your car or your house.

Chapter 7 Bankruptcy

Chapter 7 bankruptcy is known as the liquidation bankruptcy. Whether you get to keep your property is going to depend on a few different factors. If you are behind on your payments, the creditors can ask the court to repossess the property. However, if you have stayed current on your payments, you should get to keep your car and your house.

Something else that you will need to be aware of is that the court could decide to take either one if they decide that you have enough equity in your house to justify selling them to repay your creditors.