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The Myth of Losing Everything in Bankruptcy: What You Need to Know

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Bankruptcy is often seen as a last resort for those struggling with debt. The fear of losing everything can be paralyzing, but the reality is that bankruptcy can actually help you keep more of your assets than you may think. In this blog, we'll debunk the myth of losing everything in bankruptcy and provide practical tips to protect your assets.

1. Understand the Difference Between Chapter 7 & Chapter 13 Bankruptcy

Chapter 7 bankruptcy, also known as liquidation bankruptcy, involves selling off assets to pay off debts. However, there are exemptions that allow you to keep certain assets, such as your home, car, and personal belongings. Chapter 13 bankruptcy, on the other hand, involves a repayment plan over 3-5 years, allowing you to keep your assets while still paying off your debts. By understanding the differences between these two types of bankruptcy, you can make an informed decision about which one is right for you.

2. Maximize Your Exemptions

Each state has its own set of bankruptcy exemptions that allow you to keep certain assets. In California, for example, you can exempt up to $30,000 in equity for your primary residence, $5,000 in personal property, and $4,000 in a vehicle. By working with an experienced bankruptcy attorney, you can maximize these exemptions and protect more of your assets.

3. Plan Ahead for Retirement Accounts

Retirement accounts, such as 401(k)s and IRAs, are typically protected in bankruptcy. However, it's important to plan ahead and make sure that your contributions are within the legal limits. In some cases, it may be beneficial to stop contributing to your retirement account temporarily to avoid exceeding the exemption limit.

4. Consider Debt Negotiation or Settlement

Bankruptcy is not the only option for dealing with debt. Depending on your situation, debt negotiation or settlement may be a viable alternative. These options can help you avoid bankruptcy and protect your assets, while still reducing your debt load.

5. Work with an Experienced Bankruptcy Attorney

Navigating the bankruptcy process can be complex and overwhelming. Working with an experienced bankruptcy attorney can help you understand your options, maximize your exemptions, and protect your assets. Embry Family Law P.C. has extensive experience in bankruptcy law and can help guide you through this process.

Embry Family Law P.C. Is Here for You

At the end of the day, bankruptcy does not have to mean losing everything. By understanding your options, maximizing your exemptions, and working with an experienced bankruptcy attorney, you can protect your assets and get a fresh start. Contact Embry Family Law P.C. to learn more about how we can help you through this process. Our skilled bankruptcy attorneys promise to help you find the best option for your financial future so you can move forward with peace of mind.  

Embry Family Law P.C. is available by phone at (619) 485-6476 or you can always contact us online

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