Asking about bankruptcy exemptions in Chapter 13 proceeding is not the norm, but it indicates a more detailed understanding of the law. In fact, most people associate "exemptions" with Chapter 7 bankruptcy because this process requires you to forfeit certain property over to the bankruptcy estate for liquidation purposes. With Chapter 13, you never need to forfeit your property because Chapter 13 proceedings involve you making three to five years of regular monthly payments, which are a part of your debt reorganization plan. Once you complete these payments, all debt covered by the process will be dissolved.
That said, the same exemptions that apply to Chapter 7 proceedings will still apply to your Chapter 13 proceedings. Ultimately, if you own nonexempt property, the bankruptcy court will want to evaluate the total value of that property because the value of that property will represent the minimum amount you must pay over time as a part of your debt repayment plan. Because of this fact, you will still want as much of your property as possible to qualify as exempt.
Here are the typical categories of property that will be exempt from your Chapter 13 process. These categories will likely receive exemption status up to certain value limitations:
- Your vehicle
- Possessions required for your job
- Your family home
- Personal items like clothing
- Household furniture and appliances
If you're about to begin the Chapter 13 bankruptcy process, you'll want to consult with an attorney to determine which of your possessions may or may not be exempt from consideration. Asserting arguments to get certain property exempt may help lower the total amount of debt you need to repay.