Many of the ads that you read talk about getting rid of debt, indicating straight bankruptcy. Let’s talk about the difference between bankruptcies. Chapter 7, straight bankruptcy, and Chapter 13, also referred to as bill consolidation.
Did you know that many people do straight bankruptcy Chapter 7 and keep their home, car, furniture, and cash in the bank? Well, they do. It’s a law and it is their right.
Straight bankruptcy or Chapter 7 allows you to get rid of debts, bills, and financial obligations and keep almost everything you own through what is known as exemption allowances. An exemption allowance is a dollar value determined by law which is assigned to different classes of property – for example – an individual debtor gets a $20,200 allowance for any equity value in their house (married couples get a $40,400 allowance). You also get a $10,000 allowance for personal property including clothing, furniture, TV, Computers or whatever else you have. You are also entitled to exempt $1 million in 401k or retirement benefits.
Chapter 7 or Straight bankruptcy gives a family or an individual a chance to start again without the burden of past bills – while keeping all of their other property. Straight bankruptcy allows you to have a fresh start and even to buy a house and a car again.