A Bankruptcy Lawyer In University Place Wa provides information to clients about which assets do not have to be dissolved to pay back debts in a Chapter 7 filing. For instance, if the person is current on mortgage payments, he or she often can keep the home. The same is true for a vehicle unless its value is above a specified amount.
About the Home: Mortgage Payments and Equity
Unfortunately, if there is significant equity in the home, the court may require that it be sold to pay some of those obligations. This can make the homeowner feel very frustrated about having made mortgage payments regularly for years and having made a substantial down payment when buying the property. However, being current with the mortgage does not absolve the person of all other credit card debt and other obligations that have accumulated.
It does not work to take out a home equity loan to reduce the equity, and then file for bankruptcy. The court scrutinizes the person’s financial activity for several months previous to the filing and may consider this action to be fraud. The same is true with other debts the person accumulates soon before filing.
Retirement Accounts
Many retirement accounts are exempt from the requirement to use assets to pay financial obligations during Chapter 7 bankruptcy, as filed with a Bankruptcy Lawyer In University Place Wa. Many men and women start taking money out of those accounts when they are in financial trouble, wanting to try to pay their obligations. If bankruptcy seems like a possibility, it really is best to leave the money where it is. That cash will probably be protected.
In addition, taking money out of these accounts usually requires an early withdrawal penalty unless the owner is of retirement age. There are tax implications as well.
Getting Started
Bankruptcy is intended to provide protection for U.S. residents. That includes being able to have a place to live, owning a basic vehicle and maintaining a retirement account. To get started with the process, anyone dealing with overwhelming financial problems may contact a lawyer like Rafal Gorski, Attorney at Law.
