During the bankruptcy process, and when considering filing for bankruptcy, it is important to be familiar with the differences between exempt property and non-exempt property and what the different designations mean for the filing party. Chapter 7 bankruptcy protection is an important option for struggling consumers to consider which is why they should understand how it may affect them and their property.
Chapter 7 bankruptcy is a liquidation bankruptcy process that allows the filing party to liquidate assets to repay creditors. The filing party is only required to liquidate non-exempt assets, however, which is why understanding Chapter 7 bankruptcy exemptions is so crucial for filing parties and those considering filing for Chapter 7 bankruptcy protection to be familiar with. It can help them rest easy that the process is not designed to make them start over but rather to help them enjoy debt relief.
Certain categories of property are exempt from the Chapter 7 bankruptcy process but are also subject to certain limits. A certain amount of equity in a family home and value in a car may be protected from the Chapter 7 bankruptcy process. In addition, certain personal items, household items and jewelry may also be protected as an exemption from the Chapter 7 bankruptcy process. Additional categories may also apply. A wild card exemption may also be available for categories of property the filing party wishes to protect but are not already a designated category or for property the filing party wishes to protect that has exceeded the limit for the particular category.
Chapter 7 bankruptcy is an important option for struggling consumers to understand and consider which is why it is equally important for them to be familiar with Chapter 7 bankruptcy exemptions and how they offer additional protections. It is worth understanding because personal bankruptcy protections can protect relief from debt and a fresh financial start.