As an Asheville bankruptcy lawyer, many clients come to me concerned that filing a Chapter 7 case means that they will sacrifice their ability to earn a good living in the future. With very rare exceptions, a Chapter 7 case will NOT limit your ability to earn money in the future. In fact, a Chapter 7 bankruptcy case is a tool available to help folks achieve financial independence via the Bankruptcy Court’s ‘fresh start.’
Consider a Fresh Start
Snapshot in Time
When you file a Chapter 7 case, a bankruptcy estate is created as of the moment you file. You must protect the property you own at that instant by using the bankruptcy exemptions you are entitled to. In over 95% of the cases filed, clients can protect all of their property. Generally speaking, any property you acquire after the date you file, including future income, is not considered part of your bankruptcy estate.
Exceptions for 180 days
The most common exception to the general rule is for inheritances received within 180 days of the petition being filed. If you were to receive a non-exempt inheritance during that time period, the trustee could likely use the non-exempt portion to pay off debts you would otherwise be discharging. The same rule applies to unexpected windfalls like lottery winnings. Of course, if you win the lottery, your financial problems would likely be over anyway!
Earn more, not less
After you file a bankruptcy case, you will still need to make your mortgage, car, utility, and other monthly payments. That is usually the most difficult part of the financial recovery because a bankruptcy case will not help you earn more income. If you work hard, and achieve a better financial future for your family, a bankruptcy case can help you enjoy the fruits of your labor down the road by delivering those funds to a bank account, retirement account or 529 plan for minor children instead of old creditors. If you are ready to figure out your options, I’d be pleased to speak with you during a free, initial bankruptcy consultation.
*The information contained on this website is not intended and does not constitute the providing of any legal advice or any legal opinions or services to any user thereof. The information available on or through this web page is not intended and shall not be used as a substitute for the advice and consultation provided by an attorney. Any factual examples used to illustrate concepts are hypothetical and do not depict actual events or real persons.
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