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David S. Osterman, Esquire

Appointments are available Tuesday and Thursday evenings and on Saturday mornings.

99 Middle Street
Manchester, New Hampshire 03101

Tel: 603-626-5452
Fax: 603-626-5453

Consumer Bankruptcy

Nobody wants to file bankruptcy. In almost every case individuals are forced to file as a result of divorce, unmanageable medical bills, or unemployment. Consumer bankruptcy is intended to give individuals and married couples a fresh start. It is an opportunity to regroup and go forward to rebuild your credit and acquire new property without concern that your creditors can take your hard earned assets. The stigma once associated with bankruptcy is largely gone because so many working Americans have been forced to file since 2008.

Most consumers can file bankruptcy without the fear of losing their home, retirement funds, or personal property. Although the most fundamental concept of bankruptcy is that the debtor relinquishes their property to the bankruptcy court which sells it at auction and distributes the proceeds to the debtor's creditors on a fair basis, most of the typical consumer debtor's property is exempt – it cannot be taken in bankruptcy. This is an important concept which must be understood by anybody considering bankruptcy.

In New Hampshire the most important exemptions include up to $200,000.00 equity in your home, your household furniture, your beds, bedding, kitchen appliances, clothing, sewing machine, Bible, library, livestock, cemetery plot and church pew cannot be taken. The tools of your trade are exempt. Your automobile is usually protected. With very rare exceptions, your retirement funds are exempt without limitation on value. And often there is an additional "wildcard" exemption of up to $8,000 that can be applied to any non-exempt property that you own.

Please understand that this list is not complete. Additional exemptions may apply to your case. In almost every case, these exemptions are doubled when married couples files together. For bankruptcy purposes your property is valued at its liquidation (yard sale) value, not its purchase price. Typically, used household furnishings and furniture (excepting antiques and collectables) have little liquidation value.

Two types of bankruptcy are available to consumers. A chapter 7 bankruptcy is the simple one. But if you have substantial non-exempt property that you would lose in a chapter 7 bankruptcy, but that you want to keep, you can file a chapter 13 bankruptcy. In that case you are protected by the court for three to five years while you make monthly payments through the court. Those payments should, in total, equal the value of your non-exempt property.

Every bankruptcy is different, and each situation must be carefully analyzed. You should always talk to a lawyer before you make any decisions concerning a filing. Call us for a free bankruptcy consultation.