“Bankruptcy? I would never consider that! They take your home and car! They come into your house and take everything you own!”
I can’t tell you how often I hear this. And, kind of like the ants in your kitchen, this is all I see, but I know that there are more misunderstandings like this. So let’s debunk these myths:
1. Your House
The bankruptcy laws allow you to keep an amount of equity in your house, equity calculated by taking the market value of the house and subtracting the amount owed on the mortgage and home equity loans. The federal “exemptions” (what you can keep in a bankruptcy case) allow equity of $23,000.00 for each homeowner in a house that you or a dependent live in. Remember, that says each of the homeowners, so $46,000.00 for two of you, and sometimes this can be stretched. Pennsylvania allows an exemption that could be much higher in certain circumstances. Simply put, if you are qualified, and most of our clients are, we will not allow you to lose your home unless you wish to give it up.
2. Your Vehicles
Each person filing is allowed equity in a vehicle of about $3,700.00. That is equity after subtracting the amount owed. Is there a lot of equity in your car or truck? Don’t fret! To the extent that we don’t have to use up all of your home equity, we can apply some of the unused amount of your home to your vehicles.
3. Household Items
If you are like most people, you have used furniture and appliances and these are not worth a whole lot. For example, let’s say one of your neighbors is having a moving sale. How much are you going to pay for a used sofa? How about the dryer? They want how much for some old tools?
You get the picture. This stuff is usually worth little, and the bankruptcy laws protect your ability to keep them. I cannot remember a time in my more than three decades of doing this type of law that the Court ever came out to my client’s house to look.
Of course, we would still need to disclose everything that you own but, normally, everything you own isn’t all that much. In the few situations where you own too much, we often can help as well.
Instead of fearing the unknown, instead of listening to your so-called knowledgeable friends who want to steer you away from a possible bankruptcy, get the facts! Call or email us and talk to us about your situation. Our consultation is free. And you won’t lose anything.