Charlie Batch and BankruptcyFor most Americans bankruptcy is still a process they see through the lens of filings made by sports and music stars; not something they personally experience.  Because of this, there seems to be a misconception about how assets are handled during bankruptcy.  When ordinary debtors hear about Pittsburgh Steelers player Charlie Batch being forced to sell many of his real estate properties to pay for debts, they cringe and imagine what it would be like to give up their own home to the bankruptcy trustee and creditors. But what most debtors don’t realize is that while it’s okay to empathize with Batch, his situation is not a fair comparison to the vast majority of bankruptcy cases being heard in this country.

As we have explained on previous occasions, bankruptcy allows exemptions to each debtor which help to protect their most important assets from seizure by the bankruptcy trustee and creditors. In the state of Texas, the average debtor is not going to be forced to sell their home to pay creditors because as long as it is a homestead, the exemption will protect the property.  A homestead is a property which is the primary residence of a debtor. And unless you really are a rich athlete like Charlie Batch, you probably only have one primary residence that you need to protect in bankruptcy. If so, then you have nothing to worry about as long as that property is covered by the bankruptcy exemption.

Ordinary debtors also need not worry about losing their expensive collection of trendy sneakers, music CDs, electronics and other household good because the Texas bankruptcy exemptions for those items are also generous and can in most cases protect those ordinary assets. Besides, the bankruptcy trustee probably has no desire to sell off your old set of designer sneakers or to auction off your Brittany Spears music collection in order to pay your debts even if they weren’t covered by exemptions. Those types of assets simply would not earn enough money to make it worth the trustee’s efforts.

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