In a Chapter 7 proceeding, you seek to eliminate your debts in exchange for the liquidation of non-exempt assets. State laws usually protect your most valuable assets, such as your primary residence and your vehicle, up to a certain value.
If you have significant assets beyond these exempt assets, you may be required to turn them over to the trustee. However, if you do not, you may be able to keep them. For instance, if you own investment property in addition to your primary residence, this property must be surrendered to pay off creditors (or as much of your debts as feasible).
The majority of people do not have to fret about surrendering their allowance for home furnishings and other common items to the court. However, if you have a substantial balance in your bank account, for instance, you would likely be required to surrender this.
There are additional factors that you may not have considered, such as life insurance benefits. If you received an inheritance or a life insurance benefit within 180 days of filing for bankruptcy, then these proceeds would be deemed property of the estate (meaning they are available for creditors to take).
In contrast, if you file a Chapter 13 petition, you will not be required to surrender your assets because you will be committing to a partial repayment plan. Under the terms of this agreement, you would be required to make monthly payments for the next three to five years, but the good news is that you would only end up paying a small fraction of your original debt.
If you wish to retain certain assets that would have been lost under Chapter 7 bankruptcy, such as an investment property or similar asset, Chapter 13 is an excellent option. Importantly, such a repayment plan also allows you to catch up on mortgage payments for your primary residence. If you fell behind on your mortgage payments, Chapter 7 would not secure you from the mortgage company.
An essential aspect of Chapter 13 is that the amount you agree to pay must at least equal the asset's market value. For instance, suppose you own a $50,000 property that Chapter 7 requires you to surrender. If you opted for a repayment plan, you would have to pay at least $50,000 over the next few years so that your creditors do not come out ahead.""
" - https://www.affordablecebu.com/
