Most bankruptcy filers are aware that much of their property will be exempt from liquidation in Chapter 7 proceedings. In fact, it will be your bankruptcy lawyer's job to prevent as much of your property from being liquidated as possible. Your lawyer will also strive to determine, before you file, what property is potentially exempt from liquidation in your case before you choose to file.
Let's take a quick look at common property that will not be exempt from liquidation:
- Costly musical instruments unless they are required for your occupation.
- Valuable item collections, like stamps and coins.
- Family heirloom jewelry.
- Bank accounts, cash, bonds, stocks and different investments.
- A second vehicle.
- A second home or a vacation property.
Let's take a quick look at property that will likely be exempt from liquidation in your Chapter 7 proceedings. Most of the following items will be exempt up to specific value limitations:
- Your primary motor vehicle.
- A reasonable amount of clothing.
- Reasonable furniture, household goods and other items.
- Household appliances.
- Jewelry items.
- Retirement pensions.
- Part of the equity in your home.
- The tools of your trade.
- Part of your unpaid earnings.
- Social security, disability benefits and other public benefits.
- Personal injury damage awards.
Are you in a difficult debt situation that you feel could be solved by filing for Chapter 7 bankruptcy? You might benefit from learning about the benefits and advantages of different bankruptcy processes. You may also want to consider nonbankruptcy, debt resolution strategies that could be of benefit to you.