Myth Or Fact? Will I Lose Everything If I File For Bankruptcy?

The idea that you'll lose everything when you file for bankruptcy is grossly inaccurate and is often put forth by aggressive collectors. In both types of consumer bankruptcies (Chapter 7 and Chapter 13), debtors are able to keep all of their possessions.

There are some very important exceptions to this rule, however, and we can explain exactly what that means for each individual situation. We help our clients determine which chapter they qualify for and which one will best achieve their goals. And, when possible, we help our clients retain as many of their assets as the law allows, whether they are opting into a repayment plan in a Chapter 13 or choosing to wipe out their debts completely through a Chapter 7.

The law allows for the following:

  • In a Chapter 7 bankruptcy, exempted assets are protected from collections. In most cases, all assets fall under applicable exemptions. These are called "no asset" cases. Debtors also have the option to surrender any collateral (houses, cars, etc...) in full satisfaction of a debt.
  • In Chapter 13 bankruptcy (wage-earner bankruptcy), debtors can pick what assets they want to retain and continue payment for. In most Chapter 13 cases, we are able to create a more affordable repayment plan for these debts.

What Types Of Debts Are Not Eligible For Discharge In Bankruptcy?

While it's true that you cannot rid yourself of most debt related to student loans or any child support obligations, it is possible to file a Chapter 13 bankruptcy and place them into a repayment plan. Together with one of our attorneys, you can come up with a three- to five-year arrangement that works for you. Though our clients are often concerned that the court will garnish all of their wages toward a repayment plan, we only propose what you can afford, and this is different in each case.

Our knowledgeable lawyers can give you the facts and dispel any myths you may have heard about consumer bankruptcy today. Contact us at 662-278-0584 to request a free consultation at either of our locations in Holly Springs or Olive Branch, Mississippi. You can also send us an email using our online contact form.

We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.