If you want to file for Chapter 7 bankruptcy, you probably already know that it’s one of the quickest ways to clear debts. Chapter 7 bankruptcy has a lot of benefits: it’s available to those who have a low income or have no income at all. In addition, it’s the quickest way to file for bankruptcy – the entire process can be completed in a matter of months.
However, Chapter 7 bankruptcy does involve the liquidation of assets. This means that if you own a home or another asset of significant value, you may have to give this up. Not all of your assets will be subject to liquidation, however. There are certain Chapter 7 bankruptcy exemptions available to those filing for bankruptcy. The following is an overview of these exemptions.
Federally, the homestead exemption for Chapter 7 bankruptcies is $20,000. This means that you would be able to keep at least $20,000 of the value of your home when filing, but it is still likely that you will have to sell your home in order to put the rest of its value toward paying off your debts.
You will be able to keep $3,225 to put toward owning a vehicle when filing for Chapter 7 bankruptcy.
Personal property exemptions
You will, of course, need to keep basic personal possessions such as clothing and home furnishing when filing for bankruptcy. The good news is that you will probably be able to keep most of your personal possessions.
If you are considering filing for Chapter 7 bankruptcy, you should understand how your possessions will be affected by the liquidation process before doing so. An attorney can help guide you through the process.