Filing for bankruptcy can be a confusing and scary process. When you file for bankruptcy, your assets are under the control of an appointed trustee who will use your assets to pay your creditors. There are exemptions to what assets can be used to pay creditors that vary depending on where you live, what type of assets you own and how much they’re worth. Because of bankruptcy exemptions, most filers are allowed to keep the majority of their property.
Reasons Some Assets Are Exempt
Bankruptcy is a way for debtors to protect themselves from the possibility of losing all of their assets to creditors. It is designed to determine what assets can be used to pay creditors without taking so many assets that it leaves the debtors without necessities like a home or vehicle. Exemptions While Bankruptcy law and exemptions available vary depending on whether states abide by federal law or have enacted their own bankruptcy laws, common exemptions include:
- Vehicles, up to a specific value
- Homestead, or the primary residence of the debtor, up to a specific amount
- Clothing that is deemed reasonably necessary
- Household goods and furnishings, up to a specific value
- Household appliances
- Jewelry, up to a specific value
- Retirement assets
- Tools used for work
- Public benefits
Personal injury damages awarded Bankruptcy law is complex. Contact Lynch & Belch P.C. in Indianapolis at 317-888-0006, if you are faced with the prospect of bankruptcy and would like to learn more about what assets of yours may be exempt.