When individuals file for bankruptcy, they typically file for Chapter 7 bankruptcy, which is often referred to as a straight liquidation bankruptcy. In simple terms, Chapter 7 bankruptcies provide debtors with a means to start fresh financially by relieving them of the debt they have acquired as of the date of filing for bankruptcy. While some debts will be discharged, which means you no longer have to make payments on them, others – like education loans, child support or tax payments – can not legally be discharged. As part of the process of filing for bankruptcy, all of your property, income and assets will become your bankruptcy estate from which creditors can attempt to collect all or a portion of the monies owed to them. However, the law allows for some exemptions from the bankruptcy estate, which means that you can keep some of your property safe from creditors.
For example, your car can be exempt from a bankruptcy estate for a value of up to $3,000; similarly, items in your home will be exempt for up to $3,000. For clothes and musical instruments, the value limit of the exemption is up to $1,800. Additionally, a portion of your income, some balance of your personal bank account, federally earned tax credits and nearly all government benefits will be exempt from having to be included in a bankruptcy estate.
Work with Bankruptcy Experts
Depending on your specific situation, more exemptions may apply, and our bankruptcy lawyers can help tease out these complicated matters for you. With more than a decade of experience helping people in debt get financially back on their feet, our bankruptcy specialists are dedicated to providing debtors with the best possible options for resolving their debt and getting a fresh start. Learn more about your rights and options by speaking with our bankruptcy attorneys.