Defining Bankruptcy Assets
With the instability of our current economy, acquiring and protecting our assets should become a top priority. But what are assets, exactly? If you were asked to identify them, how would you respond? The most common responses include home equity, retirement accounts or vehicles. However, assets come in many forms, both physical and financial.
- Physical asset examples would include things that you own such as: Your home, vehicles, land, rental property, furniture, artwork, expensive jewelry, computers, etc.
- Financial assets would include items such as: Your income, savings, retirement, securities, pension plans, and even life insurance.
Not all Assets are Considered Equal.
We are more likely to become disabled before the age of 65 than we are to die, so life insurance is more important than most people realize. A solid retirement account is very important as well. Our aging community may one day have to live on their retirement accounts alone. What is in your retirement account could potentially determine your quality of living for many years to come. But, above all, income is the most important asset. Why? Because without it, none of the others would be possible!
Exemptions to Protect Your Assets Vary By State
With the importance of protecting your assets in mind, it’s no wonder that there are questions about how they are protecting in the event of having to file bankruptcy. The good news is that there are exemptions available to protect these assets. To maintain the ability to live a productive life “asset protection” involves a combination of laws that allow you to keep certain assets no matter what. The exemptions to protect your assets vary by state. In Wisconsin, you can choose to use either the state or federal bankruptcy exemptions. (Depending upon which system works to benefit you more.)
The Wisconsin homestead exemption may protect property that you occupy or intend to occupy. Also, virtually all retirement and pension accounts are exempt from creditors, meaning that you can keep them if filing Chapter 7 bankruptcy. There are some limitations, such as with traditional and Roth IRA’s, and other exclusions which are subject to liquidation. Most bankruptcy attorneys will be familiar with federal exemptions, but a Wisconsin attorney will be most familiar with Wisconsin exemptions. By choosing a Wisconsin-based firm, you’ll receive optimal guidance in both areas to make a comfortable decision.