Bankruptcy comes with a lot of unknowns, and for people who are going through the process for the first time, they will understandably wonder if their assets are at stake during the bankruptcy. In some cases, your assets may be at risk. Usually smaller assets will be liquidated during bankruptcy. However, under Louisiana law, you are able to make certain assets exempt during the bankruptcy process. Your home and car are two of the big examples in this regard.
These exemptions are for Chapter 7 bankruptcy fillings, where liquidation is a critical part of the process. For Chapter 13 filings, which do not include the liquidation process, the exemptions are not needed. Homes, cars, and other major assets are often spared under Chapter 13 bankruptcy.
However, there is a caveat to all of this: if your creditors have a security interest in your home, your car, or some other assets, then that will stay on even through the bankruptcy process. What this means is that the creditor could take your asset and sell it. You could utilize a reaffirmation agreement to recommit to your asset, your creditor, and your loan to prevent this from happening.
As you can tell from this post, there are a lot of caveats and wrinkles to bankruptcy law and the bankruptcy process. It is because of this that it is imperative to consult with an attorney when debt has you down. If you live in Louisiana and need legal counsel because of bankruptcy, consider the experienced lawyers at McBride Law.