Bankruptcy exemptions are critical for struggling consumers considering Chapter 7 bankruptcy as an option to enjoy debt relief. Bankruptcy exemptions protect certain types and categories of property from the bankruptcy liquidation process while the Chapter 7 bankruptcy process overall allows the filing party to enjoy debt relief and a fresh financial start.
To understand Chapter 7 bankruptcy exemptions, and their importance to a party filing for Chapter 7 bankruptcy protection or considering doing so, it is necessary to understand that Chapter 7 bankruptcy
is a liquidation bankruptcy option that allows the filing party to liquidate non-exempt property to repay creditors and enjoy a discharge of their debts. The process, however, is not intended to force the filing party to start from square one at the conclusion of the Chapter 7 bankruptcy process.
Chapter 7 bankruptcy exemptions come into play to protect certain categories of property. The different exemptions can vary by state, and may be different at the state and federal level, so it is important for parties researching personal bankruptcy options and protections to understand the rules in their state. In Tennessee, bankruptcy exemptions may be available to protect a home, car or personal property. Exemptions may include the homestead exemption; exemptions for personal property; wages; pensions; public benefits; tools of trade; alimony and child support; insurance; and the wild card exemption, as wells as some other types of property may also enjoy exemption protections.
The wild card exemption can exempt certain categories of property that may not be listed or if the value cap for a particular category has been reached. There are limits to the exemptions that the filing party should be familiar with when considering the different types of personal bankruptcy and which option is best for them. The bottom line to be aware of, however, is that personal bankruptcy options are available to help struggling consumers with the stresses associated with overwhelming debt.