Posted on Saturday, 15th January 2011 by Toby Duncan
It’s sort of ironic but bankruptcy is more necessary for those with property, income, and assets then those who are “broke.” Let me explain. If you do not own or have property, bank account, W-2 income, etc. it would be very difficult for the creditor to take anything from you. In fact, you might be “judgement proof” – meaning if you did nothing, and were sued, the creditor could take nothing from you.
However, if you are gainfully employed, own a home, have a bank account, and have other property, bankruptcy may be necessary so that the creditors can’t take your property, garnish your wages, put liens on your home or impound your bank account.
You see, when you file for bankruptcy, you can protect assets (to a limit) through use of “exemptions.” California is fairly generous with its exemptions. Many people (falsely) believe by filing for bankruptcy, all of his/her assets will be taken away. This is simply not true! (For more example, see California exemption chart.)
Oftentimes, people will slowly burn through all of their savings, retirement fund, borrow from friends and family, in an effort to avoid the inevitable – file for bankruptcy. You do not want to wait until you are completely broke before you reach out for help.
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Tags: Bankruptcy
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