Chapter 7 bankruptcy exemptions provide important protections for bankruptcy filers. For those concerned about life after a Chapter 7 bankruptcy filing, Chapter 7 bankruptcy exemptions may be able to provide some assurance as filers emerge from the bankruptcy process with a fresh financial start.
Chapter 7 bankruptcy exemptions
Chapter 7 bankruptcy is described as a liquidation bankruptcy process in which the filing party’s non-exempt assets are liquidated to repay debtors. Some property, however, is protected from the process and filing parties should know what types of property may be protected during the process.
One category of exemption includes homestead exemptions. Homestead exemptions protect a certain amount of the filing party’s equity in their home from the process. The amount that is protected can vary so filers should understand what protections are available to them. Likewise, an automobile exemption may protect a certain amount of value of the filing party’s vehicle from the process.
The personal property exemption also protects some of the filing party’s personal property. This can include their clothing, jewelry, home furnishings, appliances and more. Because exemptions are subject to limits, and are enumerated by specific categories, wild card exemptions may also be available to protect property not on the list or that exceeds the cap. It is important to know that exemptions can vary by state so the filing party needs to understand the exemptions where they live and are filing for bankruptcy protection.
Struggling with overwhelming debt day after day is challenging. For that reason, personal bankruptcy protections are available for those struggling who should also be familiar with additional protections that may be available through property exemptions.
