The decision to file a consumer bankruptcy can be a difficult one for New York residents. There can be questions about whether or not the bankruptcy will result in more hardships that the family had in the first place. There are a lot of stigmas that surround bankruptcy that people may think are difficult to overcome. However, since the recession, views on consumer bankruptcy are changing and people are seeing it less as an embarrassment and more as a viable financial option.
Recently, a television actor even announced that he was filing for bankruptcy. In this case, former ER actor Mekhi Phifer has filed for bankruptcy. According to reports, the actor makes around $7,500 a month, however, he has expenses of over $11,000 a month. Furthermore, reports claim that the actor owes $4,500 in back child support, $50,000 in lawyer's fees and more than $1 million in taxes.
When people -- including Phifer -- file for bankruptcy, they may worry about whether they can keep their personal belongings. In a Chapter 7 bankruptcy, the court will sell assets in order to pay down debt before granting a discharge of the remaining debt. People may think that they will then be left with nothing.
However, there are bankruptcy exemptions at the state and federal levels. These exemptions allow consumers to keep a certain amount of their personal property. This can include retirement savings accounts, personal property and other goods. State exemptions and federal bankruptcy exemptions can help start people off on the right financial foot following a bankruptcy.
People considering consumer bankruptcy should understand what personal property will be exempt if they decide to file. This will give people a better idea of what to expect with a bankruptcy. However, with the right help, people can keep their property and still receive the debt relief they need.
Source: New York Daily News, "Mekhi Phifer files for bankruptcy, $1.3 million in debt: report," Chiderah Monde, May 8, 2014