One of the reasons you need to speak with a bankruptcy attorney prior to filing for bankruptcy is to ensure that you receive the maximum benefit from allowable exemptions. When you file for a Chapter 7 bankruptcy, your assets are on the chopping block. The trustee can liquidate your assets to pay your creditors unless those assets are exempt. Failing to understand the exemptions can put your assets at risk, including your personal jewelry. Even your clothing is up for grabs if you do not understand the law.
Can I keep my jewelry if I file for bankruptcy in California?
Whether or not you can keep your personal jewelry depends on several factors including:
- The value of the jewelry
- The value of the other assets
- The type of bankruptcy one files for
Therefore, it is best for you to schedule a consultation to go over the specifics of your situation.
If your jewelry is worth a lot of money and you are worried about the risk of losing it, filing for a Chapter 13 bankruptcy is probably your best option. Chapter 13 is a reorganization bankruptcy. In Chapter 13, your debts are put into a monthly payment plan that lasts for up to five years. The benefit of Chapter 13 is that you can keep your jewelry.
We have the knowledge to navigate the process properly
The rules are different in a Chapter 7 bankruptcy. Chapter 7 bankruptcy wipes out your unsecured debts entirely even if you do not have enough assets. In Chapter 7, the bankruptcy trustee can liquidate your assets to pay off your debts. However, the available exemptions will determine if you can keep your jewelry or not.
California has two distinct exemption systems and you need to decide which one you will use prior to filing. This is something a bankruptcy attorney will go over with you because it directly impacts what happens to your assets.
Consider Chapter 13
If your jewelry is worth significantly more than what the exemptions allow for, then you should seriously consider filing for Chapter 13 instead. This could be the only way to protect your assets if they exceed your available exemptions. While you will need to make payments to creditors, the payments are based on what you can afford and your equity as opposed to the amount you owe.
To come up with a repayment plan we will be looking at your income and your expenses, which include everything that impacts your overall cost of living. For example, your rent or mortgage, car payment, insurance, groceries, utilities, gas, and phone bill are all included among others. This is a true budget and not a budget based on the amount of debt on your credit report. In many cases, what is left over is not enough to enter into a Chapter 13 agreement. However, if you do have money left over after an accurate budget, then Chapter 13 may be a great option to get out of debt and keep your jewelry. To discuss these options and more call our office and schedule an appointment to speak with a bankruptcy attorney.
NOTE: This is for informational purposes only and does not constitute legal advice