Chapter 7 bankruptcy might seem to some like a curse, but the reality is that it’s an amazingly beneficial way to get out of debt fast if you meet the requirements to file. Chapter 7 bankruptcy got a bad name because of its liquidation aspect. Liquidation bankruptcy can ask that you give up some of your assets. Those assets are then sold to try to pay back your creditors.
The good news for many who go through liquidation bankruptcy is that there are many exemptions. Of those exemptions, one you may want to know more about is the wildcard exemption. This is generally a blanket amount of money that can be used for an exemption of anything you possess. For example, if you have a wildcard exemption of $400, you could apply that exemption to any of the property that you want to keep. You should speak with your attorney about the wildcard exemption’s current value and if you will be able to use it in your case.
Why does bankruptcy come with exemptions?
The point of bankruptcy is to help people get back on their feet. For that reason, it wouldn’t make sense to make them give up everything they own. Instead, the goal is to give up nonessential items and to allow individuals to keep the things that they need in their daily lives. For instance, a car of a certain value might be retained, as might certain clothing or furniture.
If you are worried about your debt but are concerned about seeking bankruptcy, it’s worth taking the time to learn more. Bankruptcy can be a good option in some cases.