Individuals who work for years and years to build up their savings may find their work disappear overnight when they declare bankruptcy. Fortunately, there may be ways to safeguard savings accounts from the grips of bankruptcy liquidation.
For private citizens in the United States, there are two bankruptcy routes. One is Chapter 7 bankruptcy, which requires individuals to liquidate certain property in order to pay off creditors and discharge debts. The other is Chapter 13 bankruptcy, which requires individuals to work out more manageable payment plans with their creditors.
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Because Chapter 13 bankruptcy does not require individuals to liquidate property, individuals who choose this route will not lose the money in their savings accounts.
Individuals who file for Chapter 7, though, may have to worry. In many cases, money in savings accounts must be used to pay down existing debts. Individuals may lose a large portion or even the entirety of their savings.
Luckily, individuals may be able to save their savings. Under Chapter 7, individuals are not required to liquidate certain pieces of property that are considered exempt. Usually, these items include homes, cars, and gifts. In some cases, it may include savings.
There are very specific rules about when savings can be included among exempt property, and there may be processes an individual must go through to ensure the safety of their money.
As such, individuals wishing to save their savings should discuss their legal options with an experienced bankruptcy lawyer. Going through a lawyer can help an individual follow legal means as well as learn more about safeguarding other properties.
If you or someone you know is considering Chapter 7 bankruptcy and you are concerned about losing your hard earned savings, learn more about saving your savings from the Arizona bankruptcy attorneys of the Harmon Law Office, LLC, today.
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