The basics of Chapter 7 bankruptcy exemptions
If you are seeking debt relief, you may wonder what your options are and what they will look like for you. As part of that, you should understand Chapter 7 bankruptcy exemptions and what that could mean for you as you begin your journey to a fresh start on your finances.
There are several bankruptcy exemptions that can help protect some of the filing party’s property and assets from the Chapter 7 liquidation bankruptcy process. The different bankruptcy exemptions can vary so it is helpful to have trained guidance through what can sometimes be the confusing and complicated bankruptcy process.
To begin with, a certain amount of equity in the filing party’s home can be protected but this amount can vary based on where the filing party lives to it is important to know what is permitted where they reside. This is commonly referred to as the homestead exemption. Likewise, a certain amount of the value of the filing party’s car may be protected through a vehicle exemption. A wage exemption can protect nearly all of the filing party’s earnings in the 60 days prior to filing for bankruptcy.
Additional exemptions can protect the tools the filing party uses to perform their trade, as well as certain categories of household goods. Exemptions for retirement and personal injury awards may also be available. Finally, a wild card exemption may be available for categories of property not traditionally protected or have reached their limit. Property exemptions are also subject to certain caps. Wild card exemptions may not apply in every situation so it is helpful to be familiar with when it can be used.
Personal bankruptcy protections are available to help filing parties who are struggling to start over but not to start completely from scratch. If you are considering the benefits of bankruptcy to help you enjoy debt relief, you should be familiar with how Chapter 7 bankruptcy exemptions work.