If you have made the decision to file for Chapter 7 Bankruptcy, you must realize that this type of bankruptcy allows for the liquidation of your assets to help pay your creditors. This does not mean that you will lose all of your property, however. Bankruptcy laws do allow filers to keep certain property, or a certain amount of property, referred to as exemptions. Here is what you need to know about bankruptcy exemptions for Chapter 7.
There are state exemptions and there are federal exemptions. Most states have their own exemptions that you must follow if you live in that state. Some states allow you to choose between federal or state, but you cannot mix the two. Click here for a state by state guide to bankruptcy exemptions.
HOME: Most states have some type of homestead exemption which may allow you to keep your home. Some states allow married couples filing a joint bankruptcy to double their homestead exemption. For example, if your state has a homestead exemption of $10,000 and it allows joint filers to double, your total exemption would be $20,000. If you have a mortgage and have less than $20,000 in equity, you can keep your home. However, under those same circumstances, if your mortgage was paid in full, the court-appointed bankruptcy trustee would be able to seize your home to pay your creditors. Keep in mind that the amount of your bankruptcy debt would be taken into consideration here.
CAR: You may be able to keep your car depending on the value and whether or not you still owe money for it. For instance, if your state allows a $2500 exemption for your car and the car is worth $7500, you may have to surrender it unless you owe more than $5000 on the loan. The bankruptcy court trustee is primarily interested in property that has value and can be sold for a profit after the lien is paid off, and if there is very little profit the trustee may allow you to keep the car.
PERSONAL BELONGINGS & HOUSEHOLD GOODS: No matter what state you live in, most personal clothing and household goods are exempt, meaning you can keep them. There are rare exceptions, such as fur coats, fine art and antiques. Each state specifies the dollar amount in value of these items that you are allowed to keep. There is usually little resale value in clothing and household goods.
Bankruptcy exemptions are very specific to each state, so follow the link above for more information. Some states have special provisions for retirement accounts, bank accounts, jewelry, inheritances, etc. Your bankruptcy attorney will have a great deal of expertise on the exact amounts and types of exemptions allowed in your state.Share
31 March 2015
Were you injured at work and fighting to get the workers compensation that you have paid into each year? Sometimes, getting those payments can be very difficult. What do you do when an employer fights the claim? Do you need a lawyer to help you through the process? How will you pay for a lawyer if you cannot even pay your electric bill? You are probably as lost as I was when I went through the process. Fortunately, you can learn from my experience with the system and find the answers to many of the questions that you have about filing a workers comp claim and fighting the system when it is denied.