How Will Filing For Bankruptcy Impact Me?

By Author: Maria Gini
Total Articles: 505
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Of all the legal proceedings that a lay person may have to face, bankruptcy is one with far reaching consequences for all concerned. It would need an expert bankruptcy lawyer to suitably allay concerns. Or at least make the picture clearer for the individual filing for bankruptcy. These concerns could relate to the long-term implications for the family. Would it entail a loss of the family home? What would happen to family heirlooms? What about the vehicles owned by the individual or his/her family members? Will they be seized? Or can they be saved?
A bankruptcy attorney would be the best person to address queries related to procedural issues and implications. An important fact to be noted is that while bankruptcy cases are filed in United States Bankruptcy Court (units of the United States District Courts), federal law governs procedure in bankruptcy cases. However, state laws are often applied when determining property rights. So, where you reside or where your family home is located would make a difference - something only the bankruptcy lawyer would ...
... be able to tell you. It is state law which will help in deciding the validity of liens or rules (known as exemptions) protecting certain property from creditors.
It would usually be unwise to generalize some bankruptcy issues across state lines as state laws play a major role in many bankruptcy cases. These exemption laws vary greatly from state to state. In some states, exempt property includes equity in a home or car, tools of the trade, and some personal effects. An asset class such as tools of trade will be exempt under a more general exemption for personal property rather than by virtue of its class in some other states.
Since voluntary bankruptcy cases are filed by debtors, they would naturally be concerned about whether or not bill collectors will stop harassing them. Only an expert bankruptcy attorney can clarify which Chapter/s and/or amendments to the law are applicable in your specific case and will be able to help define ‘estate' so as to cause least prejudice to the client.

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