What Happens to Your Assets During Bankruptcy
When a person goes bankrupt, it´s because they are unable to pay off their debts. This legal status lasts around a year, and at the end, most debts are usually paid off with the help of the person´s assets. The process may seem straight forward, but for many people, it can be a challenge to use their assets to pay off their debts during bankruptcy. There are 2 different types of property that a person has.
“Exempt property” is property that debtors are allowed to keep during bankruptcy, while “non-exempt property” is property that can be taken by debt collectors. Property that is exempt is usually property that is considered a necessity for living. Here are some of the assets that are considered exempt and non-exempt. (Related topics: landlord-tenant law NYC, commercial real estate attorney in NYC)
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- Necessary clothing
- Motor vehicles, up to a certain value
- Household appliances
- Household goods and furnishings
- Tools of the debtor`s profession
- A portion of unpaid but earned wages
- Public benefits such as social security and unemployment compensation
- Collections of valuable items
- A second home
- A second car
- Expensive clothing and jewelry
Some people try to avoid bankruptcy by selling their belongings to pay off debts, but it does not always work. If you do this and still go bankrupt, the court may think that you are trying to hide your assets from the court. If you´re considering going bankrupt, or you´ve already started the process, the best thing you can do to protect your assets is hire a New York real estate lawyer. New York real estate lawyers will help you keep your assets, discharge debts, avoid foreclosure, and help you avoid harassment by debt collectors. New York real estate lawyers can help consumers as well as businesses during this process.