Everybody knows that they can discharge debts in a bankruptcy case. What fewer people know is that a Chapter 7 or Chapter 13 case also has the positive effect of protecting essential assets. A bankruptcy case, however, cannot protect what you have given away, sold, or used up.
If you are one of those potential clients trying to avoid bankruptcy and you are thinking of spending, selling, or borrowing against any of your assets, figure out whether those assets would be protected in bankruptcy before taking action.
In a Chapter 7 case, you can protect all exempt assets under North Carolina statutes. In more than 90% of cases, that means everything you own. In a Chapter 13 case, you can protect all of your property, exempt or not, in a payback plan.
Last week I spoke with a man who worked for 20 years to build $50,000 in retirement savings. He had cashed these savings out to stay current on credit card bills over a two year period. We still filed a Chapter 7 case for him, but if I had the chance to advise him before he cashed out, he could have discharged all his credit card debt AND kept the $50,000 in his retirement account.
Become informed before making your next financial decision. For those of you near Asheville in Western North Carolina, I would be pleased to speak with you during a free, initial consultation.
*The information contained on this website is not intended and does not constitute the providing of any legal advice or any legal opinions or services to any user thereof. The information available on or through this web page is not intended and shall not be used as a substitute for the advice and consultation provided by an attorney. Any factual examples used to illustrate concepts are hypothetical and do not depict actual events or real persons.