The importance of Chapter 7 bankruptcy exemptions cannot be overstated for individuals filing for Chapter 7 bankruptcy protection. Chapter 7 bankruptcy is referred to as a liquidation bankruptcy option, however, some categories of property may be exempted from the process.
Chapter 7 bankruptcy allows a struggling consumer to liquidate assets to repay creditors. According to bankruptcy exemption rules, not all property must be liquidated. Because bankruptcy exemptions can vary by state and be different at the local and federal level, so it is important for consumers considering filing for bankruptcy to be familiar with the bankruptcy exemption rules where they want to file for bankruptcy protection.
One of the primary Chapter 7 bankruptcy exemptions to be familiar with the homestead exemption. The homestead exemption protects a certain amount of equity in the filing party’s home and can be important to struggling consumers looking to file for chapter 7 bankruptcy protection. Additionally, the automobile exemption can protect some of the value of a car. There are also exemptions for personal property, including clothing, jewelry, home furnishings and appliances, that may also be available. It is important to keep in mind that exemptions may be subject to certain limits the filing party should be aware of.
Wild card exemptions may also be available for property that falls beyond the limit allowed or is not included in one of the regular categories. While personal bankruptcy options serve as an important protection for consumers, Chapter 7 bankruptcy exemptions provide additional protections consumers seeking a fresh financial start should be familiar with.