Protecting Assets in Bankruptcy

Many people believe that bankruptcy is a sign of hitting rock bottom but they would be wrong.  Bankruptcy is a tool in the law that can be used to actually protect assets and wealth from creditors.  Many famous and wealthy people have filed and survived bankruptcy with many emerging from bankruptcy and building an even greater net worth than they had prior to filing. While you may not be a celebrity or even extremely wealthy, bankruptcy bankruptcy can be a useful financial tool to help you get back on track. Yes, being financially depleted and bankruptcy often go hand in hand but It doesn’t have to be that way.  In other words, you don’t have to wait till you’re broke in order to file bankruptcy. In fact, it would probably be a better financial decision to file before you hit rock bottom.

Don’t wipe out your savings to stave off bankruptcy

Nearly 60 percent of Americans have saved less than one thousand dollars for an emergency. It is a side effect of the rising cost of living and the stagnation of wages in this country. If you’re one of the lucky people who actually do have a savingings, it would be highly advisable to file for bankruptcy before you wipe that savings out. In many cases a good bankruptcy lawyer will be able to find a way to protect most or all of your savings, especially savings you have in retirement accounts.  Any payments you make to creditors that would otherwise be discharged in a Chapter 7 are effectively just a donation to that creditor. Beyond that, even if you wanted to pay your creditor, any payments made to a specific creditor within a certain period of time of a bankruptcy filing can also be “clawed back” by a bankruptcy trustee which negates what you were doing to begin with.

DO NOT use your retirement funds

Your retirement account is a nest egg that you and/or your spouse has been building for decades. There are extremely few circumstances where it would be advisable for you to use your retirement account to pay down short term debts.  Virtually every retirement account in use today can be exempted from the bankruptcy which means you get to retain the value of that account for its intended purpose, your retirement.  Generally speaking, it makes much more financial sense to file bankruptcy to liquidate your retirement savings.

Don’t sell off your assets

The majority of Harmon and Gorove’s clients are able to keep most or all of their assets. Harmon and Gorove’s attorneys work hard to protect your assets from the trustee and creditors. Selling your assets to pay off creditors isn’t something that you have to do in most cases.  The attorneys at Harmon and Gorove work hard to make sure that your assets stay your assets. Protecting your assets in bankruptcy does require a good deal of expertise and planning, especially if you have a good deal of assets. If you have a significant number of liquid assets or rarer assets like a cash value life insurance policy or a pending lawsuit in which you could recover money, talk to a lawyer as soon as possible. Timelines are important in bankruptcy and anything you do to delay could cause you to lose irreplaceable assets. You should always be upfront with your lawyer about what assets you have, knowing beforehand is imperative to your ability to retain your assets.

Don’t ever give up

Bankruptcy provides many people with a clean slate.  Scrambling to sell off your assets or using up your savings isn’t using your money wisely, it’s panicking and making decisions that can change your life for the worse. Most people can see the need for a bankruptcy on the horizon. The warning signs are usually there long before people hit rock bottom. If you’re facing debts that seem insurmountable you should consider speaking with an experienced bankruptcy attorney before you get to the end of your rope. The staff of Harmon and Gorove are highly trained in exemption planning and asset protection.

Don’t wait

When your Bankruptcy is concluded, you will want to have as many tools to restart your financial life as possible. Keeping your retirement account, cash savings, homes and automobiles will provide you a new and fresh means of getting ahead after a bankruptcy. If you wipe out your assets before you file bankruptcy, the fresh start that bankruptcy provides won’t be as effective and won’t give you the advantages you need to get ahead.  Contact the attorneys at Harmon and Gorove today to see how we can help you get rid of your debts and get you started down a new path to financial success.