The court determines what property you keep after your Provo bankruptcy not by the value of the property, but by the equity you have in it.
Debtors preparing to file for Provo bankruptcy take a close look at their assets, usually a closer look than they’ve ever taken before. Most clients find this to be a challenging element of Provo bankruptcy. The process of making an inventory of assets and equity can be tricky, but it van be a very rewarding experience as well.
To help you prepare for Provo bankruptcy, I’ve decided to explain what equity is and how it impacts your Provo bankruptcy.
All of your assets, your home, car, or a time-share, have a fair market value. The fair market value is the dollar amount that you could sell that asset for today. You may also owe a debt on these assets. The equity you have in any asset is the difference between the fair market value and the debt you currently owe on it. For example, if I own a car that has a fair market value of $15,000 and I owe $4,000 in car payments then the equity is $11,000, the difference.
Provo bankruptcy clients frequently worry about losing all their property after Provo bankruptcy. This is where knowing the equity of your assets comes into play. Exempt assets are the property that debtors will keep after Chapter 7 Provo bankruptcy. These assets are defined as having an equity below a specific cutoff. The cutoffs are unique for different types of assets, so come in for a consultation and we can get you some answers about your personal case.
I hope this clears up some confusion for you. Provo bankruptcy can seem clear as mud at times, I want to help you make sense. Then you can do what’s best for yourself and your family. If you’re considering Provo bankruptcy, fill out the free evaluation and find out if it’s right for you.
