The question of what happens to your savings or other assets in a bankruptcy is dependent upon your individual circumstances. If you are considering a Chapter 7 bankruptcy (liquidation), then there is a chance that some of your assets, including the money in your savings account will become property of the bankruptcy estate (“taken by the Chapter 7 trustee”) and distributed to creditors. However, individuals filing for protection under the bankruptcy code are able to take advantage of certain legal “exemptions” which prevent certain property, up to a certain value, from becoming part of the bankruptcy estate. In Massachusetts, we are lucky enough to be allowed to choose from two different “menus” of exemptions: those provided under the Bankruptcy Code (the “Federal Exemptions”) and those provided under non-bankruptcy law (primarily state law, the “Massachusetts Exemptions”). Your attorney can help you to understand which set of exemptions will best protect your assets, but without knowing what the full picture of assets (all your money and your “stuff”) it is impossible to determine whether you are in danger of losing your savings in a bankruptcy.
The best way to determine whether you run the risk of losing your savings or other possessions in a bankruptcy is to consult with a qualified bankruptcy attorney. To schedule a no-cost, no-obligation consultation, call the Law Offices of James Wingfield at 508-797-0200, or visit the contact page of our website today.