For many, bankruptcy can provide necessary financial relief. As such, if you’re in serious debt, this option can help you regain control of your finances. However, as you may know, depending on the type of bankruptcy you pursue, your assets may be taken to repay creditors, leaving many potential filers unsure what will happen to their wedding ring. If this reflects your concerns, you’ll want to keep reading to learn what you can expect from this process, as well as the importance of working with a Montgomery County Chapter 7 bankruptcy lawyer to help you navigate this complex matter.
What Happens During Chapter 7 Bankruptcy?
When you file for bankruptcy, you must choose which chapter you wish to file. Generally, as a consumer, you are limited to Chapter 7 or Chapter 13. Chapter 13 is a repayment plan that lasts three to five years, in which you will make one monthly payment on your debts to the trustee, who will then disperse the funds between your creditors.
Chapter 7 is a much faster and more affordable option, as this is a liquidation process. As such, your non-exempt assets can be taken by your trustee, sold, and the funds are then repaid to your creditors. Unlike Chapter 13, this process typically only takes 6 months until it is complete. At the conclusion of your case, any remaining eligible debt is forgiven.
Will My Wedding Ring Be Taken?
One of the most concerning aspects of having property seized for many files is the prospect that their wedding ring will be taken and used to repay creditors. Due to the sentimental nature of wedding rings, this thought is enough to deter many people from this option. However, you should note that in Pennsylvania, most often wedding rings are considered exempt.
As mentioned, when you file for bankruptcy, some assets will automatically be exempt, while others will require you to use a federal or state exemption. One asset that is automatically exempt is your necessary wearing apparel. This includes assets like your daily wardrobe, shoes, and coats, but often does not extend to luxury items like designer handbags or sunglasses. However, wedding rings often fall under this category and are more often than not protected during bankruptcy.
You should note, however, that this is not part of Pennsylvania bankruptcy law, and ultimately it is up to the discretion of the trustee. While many trustees do not seize these assets due to their sentimental value, it is a possibility. As such, you may be able to utilize federal or state exemptions to protect your jewelry, which can include your wedding ring.
Unfortunately, this matter can be incredibly complicated to navigate, which is why it’s in your best interest to connect with an experienced attorney if you are considering bankruptcy but have worries about your wedding ring. At Mudrick & Zucker, P.C., our team understands how difficult these matters can be, which is why we will do everything in our power to help you navigate this process to reach the financial relief you deserve. Contact us today to learn more.
