One of the most common questions that my office receives from potential clients is, “Are my assets liquidated if I file bankruptcy?” The fear of having their assets liquidated in bankruptcy is one of the reasons why many people delay meeting with an experienced bankruptcy attorney. In most cases, delaying the need to file bankruptcy only creates more problems that could eventually lead to a situation where we would have assets liquidated.
The truth is that the large majority of debtors who file a New Jersey Chapter 13 or Chapter 7 case retain all of their property while getting rid of all, or most, of their debts. With the exception of debtors who voluntarily surrender an asset to get out from under the secured debt, the cases in which we have assets liquidated to pay creditors are few.
If you are experiencing debt problems and you are concerned that by filing bankruptcy you will see your assets liquidated, I offer a free bankruptcy consultation where you can get honest and correct answers to your bankruptcy questions. Do not base your decision to file bankruptcy on rumors or myths — get the facts about bankruptcy from an experienced bankruptcy attorney.
Are Assets Liquidated in Bankruptcy?
It is true that a Chapter 7 bankruptcy case is referred to as a liquidation bankruptcy. Assets may be liquidated in a Chapter 7 case if the trustee determines the assets have equity that is not protected by exemptions. The trustee sells the asset and uses the funds to pay the debtor’s unsecured creditors. However, in most New Jersey Chapter 7 cases, the debtors keep all of their property.
If an asset is at risk of being liquidated in a Chapter 7 case, the debtor may choose to file a Chapter 13 case to protect the asset. Assets with non-exempt equity can usually be protected in a Chapter 13 case by paying a slightly higher payment to the unsecured creditors to match the amount the creditors would receive if the asset were liquidated in a Chapter 7 case.
Chapter 13 trustees are not in the business of liquidating assets. A debtor may voluntarily petition the court to sell an asset and pay the proceeds to the Chapter 13 trustee; however, this can increase your plan base (the amount of money you must pay to the trustee). Therefore, you should always consult with your bankruptcy attorney before taking any steps to liquidate or dispose of an asset immediately prior to filing bankruptcy or during your bankruptcy case.
Contact an Experienced Mount Holly Bankruptcy Attorney
Personal Approach, Professional Service, Affordable Payment Plans
The Law Office of Travis J. Richards, LLC is a full-service Mount Holly bankruptcy law firm focused on Chapter 7 Bankruptcy, Chapter 13 Bankruptcy, debt consolidation, credit repair, tax liens, student loans, and foreclosure. We represent clients in Burlington County and throughout South Jersey.
Contact our office at 609-267-5297 to schedule your free consultation to discuss bankruptcy and non-bankruptcy alternatives. You may also use our convenient online contact form and one of our friendly, professional staff members will contact you to answer your bankruptcy questions and/or schedule a free consultation with Travis J. Richards.