First in our 10 Part Series - Top 10 Myths About Bankruptcy
number one if you file bankruptcy you lose everything you have folks that's simply not true um i i've said this many many times in the thousands of bankruptcy cases i've filed for individuals over the last several decades i i could count on one hand the number of times where somebody lost a piece of property that they didn't intend to lose when they filed bankruptcy so let me explain that when you file bankruptcy the law allows you to keep or protect certain property for instance in alabama you can protect in the the term the legal term is exempt you can exempt just under 17 000 of equity in your home now it's not just any real estate it's your homestead and the reason i say just under 17 000 is because in alabama that amount adjusts um every several years um right now it's somewhere between sixteen thousand five hundred and seventeen thousand dollars better yet if a husband and wife do choose to file bankruptcy together they get to double that exemption if they're both owners of the home you're also allowed to protect certain items of personal property but a good bankruptcy attorney and certainly in our office we're going to look at all of your property we're going to let you know what assets you can protect and what you may not be able to protect if you file a bankruptcy and if we project that you might own too much property that you may lose something if you file a straight chapter 7 bankruptcy we'll talk to you about how you can do a reorganization type bankruptcy typically that's going to be a chapter 13 for individuals but in a reorganization type bankruptcy instead of giving up any of your property you pay your creditors a certain amount over a period of between 36 and 60 months so that you can save your property but again a good bankruptcy attorney is going to look at all of your property and advise you before your bankruptcy is filed if there's any risk of losing any item of property we're absolutely going to do that at the bonnet bonus law offices so if you have concerns about whether or not you can protect certain property if you file a bankruptcy let us talk to you about it let's look at what you own and what exemptions are available in alabama or in mississippi and the exemptions are different by state um and how those will apply to what you own but you're not going to lose all of your property and if your bankruptcy is done right you're not going to lose anything that you don't intend to lose and when i say intend to lose maybe a situation and this may be particularly true after covert where your income today is much less than it was two or three years ago so you may no longer be able to make the mortgage payment that you qualified for several years ago or you may no longer be able to afford the car that you financed several years ago well we can intentionally surrender that property as part of your bankruptcy and get rid of the underlying debt in most circumstances so so there are situations where you are intentionally going to want to surrender property but but that's not going to happen if you don't intend for that to happen