A lot of people who struggle with debt are worried that personal bankruptcy will leave them in a worse position. They oftentimes believe that a Chapter 7 bankruptcy will strip them of all of their assets, making it nearly impossible for them to get back on their feet again. Fortunately, this simply isn’t the case. There are a number of bankruptcy exemptions that allow you to keep some assets, and a limited amount of value in other assets, so that you have the financial stability you need to start your life post-bankruptcy.
What if I want to keep certain assets that aren’t fully exempt?
Even in these instances you have options. Let’s say that you have an expensive vehicle. When pursuing Chapter 7 bankruptcy you can either liquidate the asset and free yourself of any debt attached to it, or you can reaffirm the debt. Reaffirmation is simply the process where you agree to retain the asset post-bankruptcy along with the debt that is tied to it. This can allow you to have a little more flexibility so that you can keep the assets that are important to you.
Other benefits of a reaffirmation agreement
There are a lot of benefits to one of these agreements. To start, you might be able to renegotiate the terms of your loan so that it is easier to pay off. Next, reaffirming debt and paying it off timely can help rebuild your credit score. It also might not be as risky as you think given that you will have rid yourself of other overwhelming debts, thereby freeing up the resources you need to stay current on the reaffirmed debt.
Come up with a bankruptcy plan that is right for you
Navigating the bankruptcy process can be scary, but you shouldn’t fear the benefits that it can give you. By working closely with an experienced bankruptcy attorney, you can learn more about what personal bankruptcy has to offer you. Hopefully then you can decide on a course of action that gives your future the most potential possible under the circumstances.