This blog recently discussed Chapter 7 bankruptcy and the benefits of chapter 7 bankruptcy. One important aspect of Chapter 7 bankruptcy, often referred to as a liquidation bankruptcy, is that it is not intended to force the filing party to start all over again with nothing. When filing for Chapter 7 bankruptcy protection, it is important for the filing party to also be familiar with bankruptcy exemptions and the protections they afford.
Bankruptcy exemptions are an important part of the Chapter 7 bankruptcy process. A Chapter 7 bankruptcy filing allows the filing party to liquidate non-exempt assets to repay creditors. That is important to note because certain categories of assets, referred to as exempt, may be protected from the process. Bankruptcy exemptions generally refer to different types of property. Bankruptcy exemptions can include protections for homes, cars, and personal property.
The homestead bankruptcy exemption protects a certain amount of value in the filing party’s home. The exemptions for vehicles can also protect a certain amount of value in the filing party’s vehicle. Personal property exemptions can protect clothing, jewelry, home furnishing, appliances and other types of personal property. In addition, the wild card protection may protect property that does not fall within one of the other categories or exceeds the cap provided for the exemption category. Bankruptcy exemptions can be subject to certain limits and can also vary based on the state the filing party lives in so it is helpful for be familiar with the intricacies of Chapter 7 bankruptcy exemptions.
Being aware of bankruptcy exemptions, and what they are, may help ease some of the anxiety filing parties may feel concerning the bankruptcy process. It is worth it to understand and be familiar with all of the various bankruptcy options when seeking the opportunity for a fresh financial start.
Source: Bankruptcy.findlaw.com, “Bankruptcy Exemptions: Chapter 7,” Accessed April 19, 2018