Many people struggling with overwhelming debt do not consider bankruptcy because they fear losing property. While a debtor can lose property in bankruptcy, with proper use of exemptions, this is usually not true.
According to the National Association of Chapter 7 Trustees, 90% of the people who file bankruptcy are “no asset” cases. Does this mean 90% of the people filing bankruptcy don’t own assets? Of course not – it means that in 90% of bankruptcy cases, all of the debtor’s assets are protected from sale by exemptions or they are liened and cannot be liquidated in bankruptcy.
Most people do not own a significant amount of property that is not exempt or protected. Property that has been transferred in the last few years to avoid paying a creditor may be a problem in bankruptcy. Discuss all your assets and transfer of assets with your bankruptcy attorney. Do not transfer any property without consulting a bankruptcy attorney. Don’t fear losing property when considering bankruptcy.
You can find more details on exemptions and how they can be used to protect all of your property if you file bankruptcy on the Chapter 7 page.