If you're drowning in debt, you may feel overwhelmed or like you will never get out of debt. In some cases, your best option for escaping debt may be filing for bankruptcy. Bankruptcy attorneys can help you with this type of case. However, the question remains: What happens to your assets after you file for bankruptcy? If you're considering filing but don't know the answers, read this article to learn what happens to your assets post-filing.

The Options

Despite most people wanting to avoid it at all costs, bankruptcy may be perfect for your financial situation. It'll allow you to reset your financial debt. However, it's a huge undertaking. There are multiple types of bankruptcy as well. Before choosing to move forward with filing for bankruptcy, our experts agree that you should consult with bankruptcy attorneys. That way, you can choose the best solution for your unique set of challenges. Often, clients generally choose between Chapter 7 and Chapter 13 bankruptcy.

Chapter 7 Bankruptcy

When filing for bankruptcy, Chapter 7 is the option that liquidates your assets and pays your creditors directly. This quickly eliminates debt but, of course, you lose your assets. The assets liquidated include residences that are not your primary residence, recreational vehicles, collectibles, valuables, boats, and other nonexempt assets. The assets that remain in your possession include your personal residence, personal effects, clothing, pensions, Social Security, and other public benefits.

Chapter 13 Bankruptcy

On the other hand, Chapter 13 bankruptcy keeps your assets in your possession. However, it's a much longer process than Chapter 7. With Chapter 13, you work with your bankruptcy attorneys and creditors and establish a payment plan that lasts between three and five years. You'll be able to retain your assets throughout the process, including items that are considered nonexempt in Chapter 7. However, you'll need to make regular payments to the creditor to reduce your debt.

Being in debt can be one of the largest stressors in anyone's life. While bankruptcy can help you get out of debt, it doesn't keep you out of debt forever. According to Legal Jobs, 81% of people who file for bankruptcy have filed at least once before. Work with your lawyer to establish a post-filing plan of action. If you are looking to work with bankruptcy attorneys to help with your financial issues, our experts at Law Offices Of Rex J Roldan PC can assist. Contact us today to schedule your consultation.