Re: do not own anything of value
As you may know, there are generally two types of bankruptcies for consumers, Chapter 7 and 13. The former is generally for those who simply require the elimination of unsecured debt such as credit cards. The latter is generally for those who have fallen behind in secured debt such as a mortgage. Chapter 13 allows you to repay any arrears over five years.
A bankruptcy protects just about all consumer assets. There is a $16,000.00 minimum homestead exemption in your principal residence. The contents of your home, if any one item is not worth a great deal, are exempt up to at least $8,000.00. There are many other exemptions, as well. Vehicles are exempt to a minimum amount of $2,400.00 and, if you do not own real estate, there is what is commonly known as the "wildcard" exemption. You may use up to one-half of the homestead exemption for any asset you want to protect.
An exemption is a dollar amount assigned to an asset so that, if a Trustee ( the person charged with liquidating assets) were to attempt to sell such an asset, he would have to pay the exemption amount to you. Since the stated exemptions usually cover the value of the assets, most consumer cases are determined to be "no asset". Thus, you simply obtain a discharge of your debt.
If you have no assets that need to be exempted, you are in the same position as every other consumer who has enough exemptions to cover their assets. In each case, you simply wipe out your debt and obtain a fresh start. The fresh start actually improves your credit in that your debt to income ratio is improved. Also, any future lender knows that it is the only creditor you will have to worry about paying. Therefore, assuming you otherwise qualify, you should consider filing. You should speak with experienced bankruptcy counsel to discuss all the ramifications.
I trust this has been helpful, but feel free to call or e-mail with further questions.
