This personal bankruptcy question was posted on the internet in 2011 in a bankruptcy discussion: “If I file for bankruptcy and I have a piece of land that is paid for will I have to sell it?”
There are basically two types of bankruptcies most individuals can file: Chapter 7 and Chapter 13 Bankruptcy.
Chapter 7 Bankruptcy, commonly called liquidation of assets, is normally the simplest and quickest form of bankruptcy. After filing Chapter 7 Bankruptcy, a bankruptcy court trustee will gather all your non-exempt assets, turn your non-liquid assets into cash, combine the new cash with other cash assets, and pay unsecured debts listed by court priority. This will be done until the money is gone or your debts are paid in full. If there is any money left, the money will be returned to you when the bankruptcy is closed.
A piece of land you own that has already been paid in full is considered an asset, and depending on your state, the asset may or may not be exempt from bankruptcy proceedings. State and federal laws include exemption status from the sale of your assets. This means you may keep any asset from bankruptcy proceeding if it is listed on a qualified exemption list. States are allowed by law to determine which set of exemptions you may use in a bankruptcy proceeding.
Any land you own not exempt in a Chapter 7 Bankruptcy most likely will be sold to satisfy the unsecured creditor’s claims against you. In Chapter 13 Bankruptcy, unsecured claims are handled differently.
Chapter 13 Bankruptcy, commonly called a wage earner’s plan, enables individuals with regular income to develop a plan to repay all or part of their unsecured debts over three or five years. In Chapter 13 Bankruptcy if you can make the payment plan and catch up on all of your secured notes, you will be able to keep all your assets, including the land you already own.
The Chapter 13 Bankruptcy plan is based on disposable monthly income. Once you have made all payments for either the three or five years planned, any unsecured debt left will be discharged. You will then be allowed to keep what assets you have remaining as long as you have kept up with timely payments on the secured assets.
Determining what to do about assets and filing bankruptcy can become complicated, depending on where you live. Bankruptcy laws in general are complicated.If you need relief from the stress of debt and you live in or around the metropolitan area of New Orleans, Louisiana, contact us at www.bankruptcyhome.com . We will help you find a bankruptcy attorney in your area to answer your bankruptcy questions.
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