Many people avoid filing for bankruptcy because they are afraid of losing everything they own for the bankruptcy court. This would fall under the myths and legends of bankruptcy found on Internet blogs. I do not know where anyone got this idea, but until recently, it was a popular opinion. I believe this is one of the reasons why people use bankruptcy as a last resort to solve their debt problems. This rumor has been circulating for years and many experts believe that it was probably launched by the credit industry. Creditors and debt collectors have said several decades over the years with the idea of scare people to continue paying their debts. Some creditors went so far as to tell the debtor that if they did not pay their debts, they would be arrested and thrown into jail. The last time I checked, there is still no jail for debtors in the United States. As long as people fall for this tactic, I guess the lies will continue.
When a person decides to file for bankruptcy and sits with a lawyer, the first question they will ask themselves is, "Will I lose all my belongings?" Generally, the bankruptcy attorney will explain the bankruptcy exemption laws and how they work. The idea of making a fresh start after bankruptcy can not exist if one removes everything to the individual. That is why Congress has enacted generous bankruptcy exemption laws to allow an individual to protect a certain amount of property when filing for bankruptcy under Chapter 7. from this, in the current economy, the personal effects used are no longer as valuable as before. The last thing a trustee in bankruptcy wishes to do is to load the used furniture truck and go to the exchange meeting to liquidate it. Trustees in bankruptcy always weigh the time against the reward of selling non-exempt property. And this is totally only in the case of property that is not protected by a derogation law.
The property that is on the Bankruptcy Trustee's radar is valuables such as antiques, a car, bank accounts and / or real estate. Once again, the ease of liquidation of the property depends enormously. If something takes time and only recovers a small amount of money, they are probably not going to waste their time. This is another reason why hiring a bankruptcy lawyer can be priceless. The bankruptcy lawyer practicing in this district will know the trustee in bankruptcy and will know what is allowed and what is expected of the debtor to obtain a successful discharge from bankruptcy. This will facilitate the bankruptcy process since filing the bankruptcy petition until the bankruptcy is released.