Bankruptcy exemptions will tell how much of your assets you will get to keep. It will also help keep your payments low.
Just because you filed for bankruptcy does not necessarily mean you will lose all of your assets.
Bankruptcy exemptions will help you keep some of your assets safe despite the bankruptcy.
Specific kinds of properties can be protected by bankruptcy exemptions.
Some of these properties include motor vehicles and even your wedding ring.
There are instances where you can get to keep the whole value of your asset, while there are times when only a certain amount of your asset will be protected.
You can opt to go for the “wildcard exemptions,” which can be used for any of your property.
If you get to exempt your asset, that property won’t be taken during your bankruptcy.
How it Works
Read more about Bankruptcy Chapters
The Chapter 7 is where an appointed trustee will sell your assets so that you can pay your debts to your creditors, which is why it is called liquidation bankruptcy. If you were able to exempt any of your assets, then the trustee can’t sell it.
Meanwhile, for the Chapter 13 Bankruptcy, you can keep you assets so that you can reorganize all your debts. But the amount you will pay your creditors depends on how much of your properties you were able to exempt.
The value of the possessions you weren’t able to exempt must be paid to the non-profit unsecured creditors like credit card issuers when you file for bankruptcy.
In this type of bankruptcy, your payments will be low because the amount will be reduced based on the value you have exempted for your assets.
Other major factors that will determine your bankruptcy exemptions are the state and federal bankruptcy exemptions as well as the federal non-bankruptcy exemptions.
To know if you can avail bankruptcy exemptions, you should consult or hire an attorney.
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