Many people file for bankruptcy as a way to prevent losing their assets. But depending on the jurisdiction, amongst other factors, you may have to give up some of your valuables. In this article, we’ll get into the different types of bankruptcy you can file and what they have to do with repossession.
Repossessions and Chapter 7 Bankruptcy
The valuables that are up for repossession largely depend on the type of bankruptcy you file. In Chapter 7 bankruptcy, a trustee takes control of your non-exempt assets. They will liquidate these assets, and you’ll be free from the obligations after the process.
Filing for Chapter 13 Bankruptcy
In Chapter 13, you can come up with a plan with your bankruptcy lawyers to pay your debts. It essentially helps people with a regular income make readjustments to their financial obligations.
Although Chapter 13 may seem like an ideal plan, it is not always the best option. It is advisable to work with a bankruptcy attorney to determine which plan works best for you. You can end up with more obligations, so it is wise to consider this option carefully. You also need to meet the requirements, which often includes having a stable income.
Non-Exempt Assets
Some assets will be non-exempt, depending on your jurisdiction. The lender can repossess the property you set as collateral when taking the loan. In many cases, they do not have to issue a notice to your bankruptcy lawyers before repossession.
In Tennessee, the creditor can get into your property to take control of your assets. The action is legal as long as it doesn’t breach the peace. That means they can’t take your valuables forcefully or break into your home.
Properties that can Be Repossessed
Your creditor can repossess any property you pledge as collateral. The lender can take back the asset if you fail to pay the debt as agreed on the contract. In many cases, the creditor doesn’t have to sue you in court to get control of the asset.
If you fail to fulfill your loan repayments, your creditor will come for the asset you offered as a guarantee. They can also take rent-to-own items and liquidate them to repay the debt. In case there is a shortfall, you may still have to fulfill the remaining part of what you owe.
How Filing for Bankruptcy may Help
Working with bankruptcy lawyers allows you to reorganize your finances or give up an asset on your terms. You can tap into their professional expertise for better estate planning that will secure your future.
Many lenders also allow you to renegotiate the debt with better repayment terms. Such arrangements are also beneficial for the creditor, as they minimize defaults and the associated costs. In most cases, this can offer relief to both the debtor and the creditor and allow them to both achieve some financial relief.
Bottom-Line
You’ll need to evaluate the options you have when considering bankruptcy. While you may hold onto your possession, you need to understand how it could impact your finances. When you’re ready to take control of your finances, reach out the bankruptcy lawyers at The Tipton Law Firm.
