The biggest fear associated with Chapter 7 bankruptcy comes largely from Hollywood movies where you see the arc of a famous person's life. Suddenly, the person becomes famous and wealthy too fast. Spending gets out of control, and the next thing you know the sports star, rocker or movie star has to file for bankruptcy.
The scene that follows usually involves creditors coming to empty out the person's house, and all the luxurious things he or she has acquired are gone. It's always the saddest moment in the film. The thing is, Chapter 7 bankruptcy isn't actually like this at all for most people.
What the average Chapter 7 bankruptcy filer experiences
Most Ohio residents who file for Chapter 7 bankruptcy don't have five Bentleys in their garages and they don't have multi-million dollar homes. The average bankruptcy filer is like most Ohio residents, they're living from paycheck to paycheck doing their best to make financial ends meet.
When someone like this files for Chapter 7, the vast majority of their personal possessions will be exempt from liquidation. For example, you'll be permitted to keep your car up to certain value limitations. The same goes for your home. If you own your home, up to certain value limitations, you'll be able to keep it. Furniture, home appliances, anything that's required for a personal business and a host of other things will all be exempt and protected from the liquidation process.
Most Chapter 7 filers are quite surprised that their lives continue as normal, and they get to preserve what they have -- like their retirement savings, house and they won't end up losing everything like it happens in Hollywood.
Discuss your debt troubles with a qualified bankruptcy lawyer
An experienced Ohio bankruptcy lawyer can look at your debt situation to determine which -- if any -- of your personal possession will likely be subject to liquidation in the Chapter 7 process. He or she will also be able to advocate for you in court to ensure that as many of your assets and possessions are exempt from liquidation as possible.
Source: Nov. 30, -0001