One of the most common concerns about filing for bankruptcy is what may happen to bank accounts, a home, vehicles, and other personal property. Bankruptcy laws include exemptions and other protections that may allow individuals to retain certain assets, but the rules depend on the bankruptcy chapter, applicable law, and individual circumstances.
Bankruptcy Lawyers Vegas provides general information about how bankruptcy attorneys may help individuals understand the potential impact of bankruptcy on their money and property.
What Happens to Bank Accounts During Bankruptcy?
Bank accounts generally must be disclosed as part of the bankruptcy process. Whether funds in checking, savings, or other accounts can be protected may depend on applicable exemptions, the source of the funds, account balances, and other factors.
Certain funds may receive special protection under applicable law. Because exemption rules and account circumstances vary, understanding how funds may be treated before filing can be important.
Protecting Property With Bankruptcy Exemptions
Bankruptcy exemptions can protect certain property from being used to satisfy creditor claims. Depending on applicable law and individual circumstances, exemptions may cover some value in:
- A primary residence
- Motor vehicles
- Household goods and personal belongings
- Retirement accounts and certain benefits
- Tools used for work
- Certain insurance benefits
- Money or other qualifying assets
Exemption limits and eligibility requirements vary.
Chapter 7 and Your Property
In Chapter 7 bankruptcy, a bankruptcy trustee may evaluate nonexempt property to determine whether it can be used to repay creditors. Many filers may be able to protect qualifying assets through available exemptions, but property exceeding applicable exemption limits may be at risk.
Chapter 13 and Your Property
Chapter 13 bankruptcy generally allows eligible individuals to retain their property while making payments through a court-approved repayment plan, typically lasting three to five years. The value of nonexempt property can affect how much must be paid to certain creditors through the plan.
How a Bankruptcy Attorney May Help Protect Assets
A bankruptcy attorney may review a person’s finances before filing and explain how applicable bankruptcy and exemption laws could affect particular assets. Assistance may include evaluating bank accounts and property, identifying potentially applicable exemptions, reviewing secured debts and liens, and explaining the differences between Chapter 7 and Chapter 13.
Understand Your Property Rights Before Filing
Moving or transferring money or property before bankruptcy without understanding the applicable rules can create complications. Bankruptcy filings require accurate financial disclosures, and certain transactions made before filing may be reviewed.
Learning how bank accounts, real estate, vehicles, and other assets may be treated can help individuals better understand the bankruptcy process and the potential risks and protections involved.
