What Property Can I Keep In a Bankruptcy
"My name is Matt Wadsworth. I am a bankruptcy attorney with Arnold & Wadsworth and in the next few minutes I am going to be talking to you about losing property in a bankruptcy and saving your house. Another couple of questions I get asked often are whether or not bankruptcy can save my house and what property I can keep. Those are great questions especially considering that a Chapter 7 is generally a liquidation of your assets and then paying it to your creditors. And so a Chapter 7 and 13 generally are going to collect your non-exempt property and this is where the Utah statutes come into play because Utah has exempted certain properties from the bankruptcy estate. In other words the bankruptcy trustee or bankruptcy court can't take them from you. And so this often comes into play with regard to your house or a secondary property that you may have, even your car, your food in your house, food storage, and your clothes. A lot of the necessities that people need are already covered and will never be taken by the bankruptcy estate. This would include even musical instruments sometimes or fire arms and so a lot of the things that you really want to keep, they are not going anywhere. And items that are of nominal value that you would sell or see at a garage sale the bankruptcy court doesn't want those things. They just don't want them. It costs more money to take them from you and then sell them than they would ever re-coop and so there is a practicality for you to consider. This is especially important when we talk about a person's house which is often their greatest concern, it is where they live, it is where their children live. And a Chapter 7 or even a Chapter 13 can both save your house but they do it in different ways. Chapter 13 basically saves your house. There are no ifs, ands or buts about it. In a chapter 7 situation however, there is a period of time where you can enter into negotiations with your creditor whether it be Wells Fargo, Chase or Cypress Credit Union, it doesn't really matter. And during that stage you can talk about your payment terms. In order to maintain the loan on your house, the creditor has to have you sign a reaffirmation agreement. And so during that stage you basically re-open negotiations for your loan. Sometimes they can be modified. Sometimes the creditor is rigid though and does not do so and they do not have an obligation to change the terms. In a chapter 13 however, whatever amounts you are behind you automatically are brought current and this is one of the other perks of a Chapter 13. And so if you are behind on a house payment like what we have just been talking about or even a car, if you are a few months behind on a car, you will automatically be caught up on your payments. The amount or the arrears that you owe doesn't go away though. And so you have to pay it back in the 13 and that's where you pay it back over a course of three or five years or somewhere in between. So those are some things for you to consider but the takeaways, no you are not going to lose your stuff and you're not going to lose your house unless you really need to lose your house. And so that is something that we would discuss when you come into a chat with me. If you are in a situation where you are being garnished or you are about to be garnished, or your car is about to be repossessed, or you are in the middle of a foreclosure or about to go into a foreclosure. Please give me a call anytime. We are happy to answer any questions that you may have and we do give free consultations."