Bankruptcy Exemptions: How to Keep the Property in 2021
When people think about bankruptcy like the chapter 13 bankruptcy, they often imagine gangsters appearing in front of a house and taking all private belongings of a poor debtor. In reality, it rarely works this way. While Chapter 7 bankruptcy type offers to sell all possessions, there are still exemptions that can protect you. You can contact your bankruptcy law attorney like the DebtStoppers bankruptcy attorneys and consult about your unique case. Government usually offers a system of protection for your property during bankruptcy.
Chapter 7 Exemptions
Your property is usually under threat when you are filing for Chapter 7 bankruptcy. While it removes almost all your debts or significantly cuts them if you own many properties, the trustee may sell some of them to pay the creditors. The number of sold property depends on the so-called exemptions, the state laws that indicate things you can protect from creditors.
Once you file for Chapter 7 bankruptcy, you agree that most of your property becomes bankrupt estate. It means that some of your belongings will be sold by the trustee to pay the debts. It does not mean that you will lose everything and will have to sleep in the tent outside your former house. Bankruptcy is the chance for a new start and the way to keep the business. Exemptions offer you to keep your house, workplace, clothes, utensils, furniture, and even car so that you can continue your work.
The number of properties you may exempt usually depends on the state you live in and the regional laws. For example, if you start with a $10000 car exemption, and your car costs $80000, you can keep the car. But in case you live in a state with a $70000 car exemption, the trustee may sell it. To get more tips, check out this blog post about declaring bankruptcy with The Pope Firm.
Cars and Houses
There are some chances that you might need to take out the loan and purchase your car or house. The lender usually has the security interest in this property, so you can lose it if you don’t make loan payments in time. In every state, there are exempts for the equity of the property and the house. Based on the equity you have in the property, the trustee either sells it or not. You can use an equity release calculator to determine what your options are. If you have no equity in the house or property, the trustee will not take them. Still, you should pay the lender.
Clothing and Goods
Since clothes and small goods do not have big value for sale, they are fully exempt in many states. Still, if you possess clothes or goods of a high value, you will have to sell them with the help of a trustee. Check out the exemption for the clothing in your state.
Money and Jewelry
Almost all the states can cover some parts of personal property. They will leave you enough money for your life and work. You have to search for the exemptions on jewelry, as some states leave it to you. This way, you can sell them to jewelry buyers and make money to start again. To find a reputable buyer, go to https://www.windsorjewelers.com/fashion-jewelry-wholesale.
Which Exemptions to Look For?
You have to read everything about exempts in your state. It is crucial for your bankruptcy filing and might affect your further decision. The best way is to consult with your bankruptcy attorney in the first place and calculate the prices of each of your possessions.