It’s incredibly difficult to even consider the possibility of bankruptcy, let alone actually filing for it. One of the biggest concerns of anyone who sees themselves facing bankruptcy is whether they can protect some of their property or accounts. This is a complicated question to answer since it basically depends on where you’re located.
For example, some states don’t allow you to keep your properties or your accounts untouched when filing for bankruptcy. In a state like Florida, however, it is easier to protect a property from being as compared to the state of Georgia. You’ll need a financial advisor to help you determine what is protected by law in the state where you are.
We do know for a fact that, regardless of where you file for bankruptcy, there are two things that will most assuredly not be taken from you; the property that you state as your home and your tax-protected retirement fund.
By law, you are able to protect the place where you currently reside. This means that, when you file for bankruptcy, you are entitled to keep your home. Any other property, however, might be at risk. Rest assured in the knowledge that you can keep your home safe from creditors. Of course, this is also dependent on which state your home is in. Most states have a certain number of acres that are allowed to be kept. It’s important to find out this amount before you file your bankruptcy.
Your Retirement fund
Tax-exempt retirement funds are completely safe from creditor’s hands. No one can touch your retirement fund at all. IRA’s can be protected with up to a million dollars per person. Don’t think that you can get away with funneling money into these accounts though. During a bankruptcy period, your retirement fund will be inspected. Any suspicious behavior could lead you to more trouble – and legal implications – than it is really worth.
The best advice is to find a good financial advisor to help you choose the right options before it ever comes to a point where you’re faced with the proposition of filing for bankruptcy.
Knowing if bankruptcy is the best debt relief option can be a challenge. Searching online you will find several websites promoting alternatives to bankruptcy such as debt settlement. Alternatives to bankruptcy sound good in the beginning but many times leave you in a worse financial situation. Bankruptcy is not a bad choice, if it is right for you, and people from all walks of life file bankruptcy.