Chapter 7 Bankruptcy Exempt Property
If you're considering a Chapter 7 bankruptcy filing to help ease your personal debt burden, you're probably wondering about Chapter 7 bankruptcy exempt property in your state. And that's good: it's important to know what Chapter 7 could do for your specific finances before you file.
Exemptions provide protections against creditors, and are unique in every state. A local attorney can help you evaluate the benefits of filing Chapter 7 bankruptcy, and determine if Chapter 7 might be right for you.
To speak with a bankruptcy lawyer near you, simply fill out the below form and arrange a free, no-obligation consultation today.
Exempt Property in Chapter 7 Bankruptcy
So how do you know whether your personal possessions will be protected in Chapter 7 bankruptcy? Exempt property varies from state to state, but most states offer some sort of exemption for property in the following categories:
- Homestead exemption: Depending on property values where you live and the date of the last update of Chapter 7 exemption laws, the value of the homestead exemption could range widely. This exemption is designed to allow filers to keep their homes or whatever equity they have in their homes during a bankruptcy filing. In general, this exemption prevents bankruptcy trustees from selling a filer's house to raise money for creditors. If you rent, you don't have to worry about this exemption, and may be able to apply the value to other possessions.
- Vehicle exemption: Another type of commonly exempt property in Chapter 7 bankruptcy is an automobile of some sort. As with the homestead exemption, most states have a dollar limit on the car’s value. If the value of your car exceeds the value of the exemption (or if you’re otherwise not sure how to handle your car in Chapter 7 bankruptcy), you should ask your lawyer about your options for handling car loans and leases in bankruptcy.
- Work tools exemption: Most states provide a specific exemption for tools that people need to do their jobs. The logic here, of course, is that people must have certain tools in order to earn the money to maintain a financially stable life after bankruptcy.
- Clothing and personal items exemption: Another common exemption is one for clothes and personal items. This exemption may have a dollar amount on it or may include almost all of a person's low-value property (including books, family photos, dishes, and similar items), depending on the state laws.
- Wildcard exemption: Some states offer a so-called "wildcard" exemption or an exemption up to a certain dollar amount for any one item. In some cases, this allows a Chapter 7 filer to keep an important family heirloom or a pricey engagement or wedding ring. Other states allow filers to put this exemption amount toward one of the other pieces of exempt property.
Ask a Lawyer about Exempt Property in Chapter 7 Bankruptcy Where You Live
Every bankruptcy filing is unique. The only way to get a solid idea about which of your possessions will be exempted in a Chapter 7 bankruptcy filing is to actually hammer out the specifics of your case.
If you're ready to find out whether your personal belongings will be exempted from a Chapter 7 liquidation sale, take this opportunity to connect with a bankruptcy lawyer practicing in your state.