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Helping People Get A Fresh Financial Start to Regain Financial Independence

Helping People Get A Fresh Financial Start to Regain Financial Independence

Bankruptcy exemptions and the preservation of assets

On Behalf of | Nov 21, 2022 | Bankruptcy, Chapter 7 Bankruptcy

Rising prices and unexpected expenses can place great financial strain on families throughout Indiana. For many facing financial struggles, bankruptcy can provide relief and a fresh start

Bankruptcy offers financial relief

When a person files for bankruptcy, a court-appointed trustee is responsible for liquidating certain assets belonging to the person and using the proceeds to pay off creditors. Most remaining debts are then discharged, leaving the person with a clean financial slate.

Property exempt from liquidation

While bankruptcy provides relief from debt, some considering bankruptcy may have concerns about the prospect of losing their property. Fortunately, not all assets are subject to liquidation in a Chapter 7 bankruptcy. Instead, certain categories of property that are necessary for life and work are exempt from liquidation.

For many people the homestead exemption is the most important exemption from liquidation. This applies to a person’s primary residence, up to a certain value. Thus, most people filing for Chapter 7 bankruptcy are able to remain in their homes.

Other exempt property include household goods, appliances and clothing up to a certain value. Pension or retirement benefits, as well as any public benefits such as Social Security, are also exempt from liquidation. A portion of earned but unpaid income is exempt, as are many tools or equipment used for professional purposes.

Knowledgeable attorneys can advise clients to help make sure they receive the full benefits of bankruptcy exemptionshelp. After all, exempt property like a home or retirement account is often a person’s most important and valuable property.


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