Bankruptcy is one of the strongest tools the law gives individuals and companies to protect themselves. Many people find that they simply cannot meet their monthly payments, and bankruptcy can offer a path to financial freedom.
For a long time, public opinion looked down on people who file bankruptcy, but that view is no longer as common as it once was. We may find ourselves falling upon hard times for various reasons, and bankruptcy exists in the law to provide a fresh financial start. If you face debts that you cannot pay, bankruptcy may be a good fit for your needs.
Exempt property under Chapter 7
Bankruptcy comes in several forms, and Chapter 7 is often available to the largest number of borrowers. Under Chapter 7, individuals agree to forfeit some of their property and live with some borrowing restrictions for a period of time in exchange for debt relief. However, some property is exempt from bankruptcy, meaning that individuals may keep exempt property and still qualify for discharge of their debt.
Each borrower’s circumstances are different, meaning that some property may be exempt in some cases, but not others. Typically, exempt property under Chapter 7 includes:
- Vehicles, particularly those used for work
- Household appliances
- Clothing
- Necessary household items
- Jewelry up to a certain value
- Public assistance benefits
- Compensation from a personal injury claim
- Some unpaid wages
- Equity built up in the filer’s primary home
- Tools necessary for work
- Pensions
Depending on the kind of debts that you carry, how much you owe, and other factors, you may be able to keep some or all exempt property.
Now is the time to protect yourself
Bankruptcy carries a bad reputation as an experience that no one wants to encounter. However, many borrowers quickly realize that bankruptcy is not as painful as they imagined, particularly when they experience the relief of debt discharge.
If you believe that bankruptcy may be a good option for your circumstances, it is important to approach the process with strong legal resources and guidance. There are many points in a bankruptcy where borrowers can make costly mistakes, and a well-built legal strategy can help you avoid these pitfalls.
It is also important to act quickly to ensure that your rights remain secure. Make sure to use the resources you have available to keep your rights protected as you move toward the debt relief you need.
