What items can be repossessed?

If you are knee-deep in debt and you are considering filing for bankruptcy, one of the most important things that you should know is that some of your items may be repossessed. During the process of bankruptcy filing, the court will order an automatic stay that will stop creditors from repossessing your properties. However, this is only temporary. If you are granted Chapter 7 bankruptcy, the court will order repossession of all your non-exempt properties. These repossessed items will be liquidated and the profits will be used to pay for the creditors to which you owe money from. Items that can be repossessed are those that you used as collateral for the loans that you obtained such as cars, houses, commercial property, and so on. However, it is vital that you know bankruptcy laws and the protection it provides regarding possession of certain items. There is what they call, bankruptcy exemptions, which are properties that cannot be repossessed. Laws on exemptions vary according to state. But the common exemptions include homestead, personal property, wildcard, wages, pension, public benefits, child support and alimony, and insurance. Homestead includes real or personal property. Personal property includes assets in qualified tuition programs, medical savings account, education savings account, and motor vehicles.

Wildcard is for a debtor that does not receive homestead exemption. Wages are disposable earnings or pension payments needed for daily financial support. Public benefits are social security benefits, veterans’ benefits, disability benefits, and so on. Alimony and child support are the payments needed for raising up the children and for maintaining daily expenses. Insurance can be life insurance payments, illness benefits, and disability benefits and so on.