If your income has decreased for some reason and you are struggling to meet your financial obligations, it’s time to book an appointment with a trustee and start discussing debt relief options.
When your debt situation is particularly bad, you may need to consider bankruptcy because you are unable to pay the full amount that you owe.
But people naturally have a lot of concerns about exactly how their assets will be handled during bankruptcy and what will and will not be seized.
One of the most common questions that people ask is, I have furniture of sentimental value – will I lose it in bankruptcy?
Many people are concerned that they will be judged for filing for bankruptcy and concerns about the impact that it will have on their credit rating are common as well.
But the thing that people really worry about is losing sentimental items in their home.
If you have furniture that was passed down the generations and holds a lot of memories, the prospect of losing it can be a lot worse than the financial issues.
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What Happens To Furniture During Bankruptcy?
If you file for bankruptcy, what happens to your furniture?
Many people assume that, when you file for bankruptcy, a crew arrives at your home shortly afterwards to clean everything out but that is not the case.
Some assets will be seized and sold to pay off a portion of your debts, but there are exemptions and you will be allowed to keep certain essentials.
Although the exemptions vary slightly depending on where you live, they usually cover roughly the same things.
Common exemptions include:
- One car (up to a certain value).
- Your house (up to a certain value).
- Tools that are required for work.
- Heating fuel.
- Health aids and equipment.
- Farm animals.
- Pension and retirement savings.
Any items that have no significant resale value are also exempt in most cases.
When it comes to sentimental furniture, there are no hard and fast rules and it all depends on your situation.
Things like the value of the furniture and its utility will be taken into account by the trustee when deciding whether you will be allowed to keep certain pieces of furniture or not.
If you are worried about your sentimental furniture and whether it will be seized during bankruptcy, it’s important that you seek professional advice because the rules are quite complex and they are always changing.
If you speak with bankruptcy experts, they will assess your situation and give you some idea of which pieces of furniture you will be able to keep.
They can also negotiate with creditors on your behalf and argue the case for keeping sentimental furniture.
Working with a bankruptcy expert will also make the process a lot easier and they can answer any questions that you may have along the way.
It’s important to remember that bankruptcy is designed to give you a fresh start, so you won’t be expected to start again without any of your existing assets and only those that have a high cash value will be seized, as long as they are not exempt.
If you are still concerned about losing sentimental furniture and other assets during bankruptcy, you should consider other debt relief options.
What Are Your Other Options?
In some cases, bankruptcy is your only option but you should consider it a last resort and see whether you have any other options first.
If your debts are not too high and you are able to meet most of your financial obligations, you may be able to use a debt consolidation loan to reduce interest payments, so you can pay off the full amount.
If you are able to do this, you won’t have to surrender any of your assets and your sentimental furniture is safe.
Unfortunately, most people that are considering bankruptcy are past that point and there is no way that they will be able to pay back the full amount.
But before you file for bankruptcy, you should consider a consumer proposal.
When you file a consumer proposal, you offer to pay back a portion of your debt over a set period of up to five years.
The total amount that you pay back will be more than you would pay if you filed for bankruptcy, but your assets are protected.
Unlike in bankruptcy, a consumer proposal allows you to decide which assets you keep, so if you have sentimental furniture that you do not want to surrender under any circumstances, this is your best option.
In some cases, your creditors may refuse your consumer proposal, so it is important that you seek professional advice before you move forward.
As long as you make a high enough offer and everything is filed correctly, your creditors should accept your proposal and your sentimental furniture is guaranteed to be safe.
If you are concerned about any sentimental furniture and how it will be affected by bankruptcy, the best way to alleviate your worries is to inform yourself of the laws and find out exactly how bankruptcy will affect you.
If you speak with a licensed insolvency trustee, they will be able to assess your situation and let you know whether you are likely to be able to keep your sentimental furniture or not.
We can take you through the process of bankruptcy and give you all of the advice that you need regarding your obligations and your assets, so you know exactly where you stand.
If it is likely that many of your important assets will be seized, we can help you to explore other debt relief options, like consumer proposals.
This is often a much better option because you get to keep more of your assets, so you don’t need to worry about losing sentimental furniture.
If you have serious debt issues and you need advice about your assets during bankruptcy, or any other debt relief options, get in touch today.
You can reach us by phone or fill out an evaluation form and we will get back to you.
How to File for Bankruptcy
What is Bankruptcy?
How Does Bankruptcy Work?
What is the Cost of Bankruptcy in Canada?
How to Rebuild Credit Following Bankruptcy
Personal Bankruptcy in Canada
What Debts are Erased in Bankruptcy?