Assets in a Chapter 13 Bankruptcy
Your assets are all of the property that you own. One easy way to determine whether you own a piece of property is to look at whether you are titled to the property, not whether you merely have possession of it. If you are titled to a property, you have the right to own it. This can include furniture or a musical instrument that you purchased. However, if you merely have possession of an item, such as a television borrowed from a friend, the television is not considered part of your assets. Your assets can also include property that you still owe money on, such as a house or car. It can also include assets that you have a legal right to receive, but have not receive it yet, such as tax refunds or proceeds from an insurance policy.
A Chapter 13 bankruptcy is designed to allow you to keep all of your property regardless of its value. However, pursuant to the Chapter 13 payment plan, you will have to make certain payments to retain your assets. The exemptions you can claim on your assets in part determine how much you will have to pay to your unsecured creditors. The attorneys at The Law Offices of Chen & Tran can help you properly maximize all your exemptions.
Assets Secured by a Debt
To keep your assets that are secured by an underlying debt, you need to continue making payments toward the satisfaction of your secured debt, or pay them off in your payment plan if you wish to retain the assets. The most common secured assets most people own is a car or a home.
For example, if you owe mortgage arrears on your home, you can lump all your arrears and any other debt you owe into one single debt, paid through the Chapter 13 plan. However, to keep the home, you will need to make the Chapter 13 plan payments and your current monthly mortgage payments.
If you own nonexempt assets, under a Chapter 13, you will be allowed to keep them, unlike a Chapter 7 where the trustee will seize those assets and liquidate them. However, you may be required to pay back your unsecured debts under your Chapter 13 plan, with a minimum amount at least as much as what your unsecured creditors would have received if you had filed a Chapter 7 bankruptcy.