By Matt Hopkins
Special to The Sun
EDITOR’S NOTE: This is a weekly series of columns written by attorneys at Lester, Loving & Davies Law Firm in Edmond.
Q: If I file bankruptcy, will I lose everything I own?
A: There is no answer to this question that applies to every type of bankruptcy case, every debtor and every set of facts related to assets and liabilities. So, the best answer to this question is that it has no answer until your specific situation is evaluated by someone who knows what she is doing. To that end, the only real answer I can offer is that you should contact an attorney experienced in bankruptcy. The attorney can evaluate your situation and give you specific answers to this and other questions.
That being said, know first that this is a common question asked by almost every person contemplating bankruptcy relief. The answer depends on many, many factors, including the type and amount of property you own, the type and amount of debt you have, and what your personal circumstances happen to be. You may own some property that qualifies as exempt from bankruptcy, in which case you will get to keep it. Other types of property are nonexempt, which means you may lose it in the bankruptcy case.
Bankruptcy is designed to give debtors a fresh start in an organized fashion. So, generally speaking, the property you get to keep is designed to aid you in providing financially for yourself and your family. Under most circumstances the exemption amounts are enough to allow debtors to keep their home, car, household furnishings, life insurance plans, qualified retirement accounts and other similar property.
However, when you file for bankruptcy, the bankruptcy court appoints a trustee. The trustee appointed to the case may sell all nonexempt property to pay your debts. In some cases, the trustee will sell the property to a third party. But under some circumstances, you will be able to buy your stuff back from the trustee by obtaining money from a third party or by paying for it over time.
Your attorney will help you navigate issues related to retaining property in bankruptcy, and will help you claim every exemption to which you are entitled. Know this: If you do not claim an exemption, you will lose the property that you might otherwise have been entitled to keep. Without a complete analysis in that regard, you may not realize the full benefit a bankruptcy is designed to offer. Know your rights. Hire an attorney. And good luck.
MATT HOPKINS is an attorney for Lester, Loving & Davies P.C. More information is available at lldlaw.com. Send questions to firstname.lastname@example.org.