Filing for Chapter 7 bankruptcy means that you are willing to repay as much of your debts as possible through the process of liquidation. Chapter 7 bankruptcy has many advantages. For example, the process is extremely quick in comparison to other bankruptcy filings. In addition, the majority of Chapter 7 bankruptcy filings involve a debt discharge upon the completion of liquidation. However, many prospective filers are concerned about losing the majority of their possessions in the process.
If you are considering filing for Chapter 7 bankruptcy, it is a good idea to fully understand the bankruptcy exemptions in place so that you know what assets you can keep.
What are bankruptcy exemptions?
Of course, you must be able to keep some basic assets so that you can maintain a certain standard of living. This is why some of your assets will be considered to be exempt from bankruptcy. In other words, bankruptcy exemption assets are the assets that you can keep.
What assets are exempt?
Generally speaking, you will be able to keep any property that is essential to your daily life and that is not excessive. For example, you will be able to keep a vehicle up to a certain value. You will also be able to keep clothing that is reasonable, as well as low-value jewelry. You may also be able to keep a portion of the equity in your home.
If you are concerned about your financial situation, and you are considering bankruptcy but are worried about losing assets, it is important that you take the time to understand how bankruptcy exemptions will work in your situation.