Chapter 7 bankruptcy, the most common type of bankruptcy filed in the state of Nebraska, is sometimes called a liquidation bankruptcy. A trustee collects property and sells the assets to pay the creditors. However, this does not mean you will lose all your assets if you file a Chapter 7 case.
Certain property is exempt and may not be taken by creditors unless it is encumbered by a valid mortgage or lien. A person is usually allowed to retain his or her unencumbered exempt property in a Chapter 7 case. A person may also be allowed to retain certain encumbered exempt property. Encumbered property is property against which a creditor has a valid lien, mortgage or other security interest.
Examples of property you will be allowed to keep include:
- A home falling below a specified level of equity
- Vehicles falling below a specified level of equity
- Essential household furnishings
- Clothing and personal effects
- Necessary tools of the trade
- Pensions or retirement benefits
- Unemployment, workers' compensation, and other government benefits
The value of exemptions doubles when a married couple files jointly for a Chapter 7 bankruptcy.
Typically, debtors are able to keep most, if not all, of their property and still receive full bankruptcy protection.
Contact Us Today
At Steffens Law Office, we believe a Chapter 7 bankruptcy can give you a fresh financial start after suffering setbacks due to illness, job loss, or unplanned expenses. Contact us today to schedule a free, no-obligation case review.