If you file for Chapter 7 bankruptcy, there is a chance that your assets may be liquidated. The money raised from the liquidation will be used to pay creditors, and, in most cases, any remaining balances are discharged at the end of the proceeding. Assets such as equity in your New York home, personal items, or any other items that aren’t worth much are exempt from being sold.
You must provide a full list of assets with your bankruptcy petition
By law, you are required to disclose the existence of any property that you own at the time of a bankruptcy filing. The trustee in your case will review this inventory of assets to determine which items can be sold and which ones can stay in your possession. If you fail to disclose an asset, you could be subject to financial or other penalties.
Items are usually sold at auction
After reviewing your court filings, the trustee will schedule a date for your nonexempt property to be sold. The date will likely be advertised in a newspaper, on the radio, or on television to ensure that all interested parties can make arrangements to attend the sale. There is a chance that you will be allowed to participate in the sale or make an effort to regain an ownership interest in a home, car, or other secured asset.
There is no guarantee that you’ll lose any property
If you don’t have any non-exempt property that can be liquidated, your creditors will simply have to accept the fact that they won’t get anything from you. A bankruptcy law attorney will likely be able to provide more insight into what happens in these types of cases. It’s important to note that you are allowed to make voluntary payments to creditors after a case has been discharged.
Filing for bankruptcy may be an effective way to get out of debt in a timely manner. An attorney may be able to explain the various potential benefits of doing so, such as obtaining an automatic stay of credit collection activities.