Filing for bankruptcy can be difficult, but it’s sometimes the best option when dealing with unmanageable debt. One common question people have is, what assets can they keep?
Even though there are limitations, it may still be possible to keep items such as your home and your car.
What is bankruptcy?
When a person (or business) cannot repay their outstanding debts, they can petition the court. All of their assets are evaluated and some may be sold to repay the creditors. The two most common types of individual bankruptcy are:
- Chapter 7 allows the individual to discharge all or part of their unsecured debt. However, a trustee can liquidate or sell the debtor’s nonexempt assets in exchange. Furthermore, secured debt is typically not eligible to be discharged under bankruptcy.
- Chapter 13 enables the individual to create a plan to repay all or parts of their debts to creditors over three to five years.
So, what is considered an exempt asset in a Chapter 7 bankruptcy? New Hampshire has a long list of what an individual or married couple can protect from creditors:
- Homestead: $120,000 of the equity in your home ($240,000) for couples
- Wage: 50 times the federal hourly minimum wage per week
- Personal: clothing, bedding, home health aides
- Appliances: Stove, refrigerator, furniture and sewing machine for a combined value of up to $3500
- Vehicle: Up to $10,000 of the vehicle’s equity.
Several other items may be exempt from bankruptcy, as well. While New Hampshire believes in the importance of creditors receiving payment, they also want their citizens to have the needed assets to make a fresh start.
Since New Hampshire has a means test and various exemption laws, it’s essential to work with someone who can help you navigate bankruptcy proceedings.
