What Are the Basic Exemptions?

In the process of Chapter 7 bankruptcy, the liquidation process entails both debts and outstanding assets.  However, there are basic bankruptcy exemptions allowed for individuals during the Chapter 7 process.  These exempt assets are those exempted from liquidation during the bankruptcy process, which may include homestead exemptions, automobile exemptions, and exempt retirement accounts.  Consulting with a bankruptcy attorney can identify specifically, which assets in your household are exempt and non-exempt.

What Are the Most Common Bankruptcy Exemptions

Some of the most common bankruptcy exemptions during Chapter 7 include personal automobiles, which are typically capped at a dollar value, equity in the home, and some retirement accounts up to a certain value.  The difficulty in outlining specific bankruptcy exemptions lies in that most states offer an exemption list that can be adhered to, as well as the federal exemption guidelines as well.  In essence, depending on your state of filing, debtors can choose what exemption list they wish to follow.

Non-Exempt Property during Bankruptcy

Bankruptcy property that is deemed non-exempt will be used to equitably repay creditors that appear during a meeting of the creditors.  This property will include most cash, checking, and savings accounts, as well as other personal property not specified in the given exemptions list in your state.  Additionally, if there are outstanding debts that are non-dischargeable in a Chapter 7 filing, future repayment plans must be prepared to rectify these outstanding debt obligations.

How to Get Help Filing

An attorney is most likely one’s best source of information prior to filing regarding the potential exemptions in your specific jurisdiction.  Again, each debtor’s financial situation, including debts and assets, varies widely, therefore, individuals should consult specifically with a bankruptcy attorney about their own situation, rather than gauge their exempt and non-exempt property from other party information and anecdotes.