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Chapter 7 bankruptcy exemption basics

| Apr 10, 2020 | Chapter 7 |

Chapter 7 bankruptcy exemptions can provide additional protections to struggling consumers who have filed for Chapter 7 bankruptcy relief. Because of the importance of Chapter 7 bankruptcy exemptions, filing parties and those considering filing for Chapter 7 bankruptcy protection should be familiar with what Chapter 7 bankruptcy exemptions are.

Chapter 7 bankruptcy is considered a liquidation bankruptcy process. It allows the filing party to liquidate their non-exempt assets to repay creditors and enjoy debt relief. This may initially cause those considering filing for Chapter 7 bankruptcy anxiety which is why it is important for them to understand the protections Chapter 7 bankruptcy exemptions provide to help them keep certain items and some of their property during the Chapter 7 liquidation process.

Two of the most important Chapter 7 bankruptcy exemptions include the homestead exemption and protections for the filing party’s car. The homestead exemption can protect some of the equity the filing party has in their home and the car exemption can protect some of the value the filing party has in their vehicle. In addition, certain personal property may be exempted from the process including clothing, jewelry, household furnishings and appliances.

Wild card exemptions may also be available because property categories are subject to limits. The filing party may be able to use the wild card exemption for a property category that has reached its limit or property that does not fit into one of the named categories. Chapter 7 bankruptcy provides a variety of valuable protections consumers should be aware of to help guide them to a fresh financial start.