You've decided that bankruptcy might be the right choice for you, but you don't want to lose everything you've worked for. You fell on hard times after getting let go from your job, and now there's no way to make ends meet.
Fortunately, bankruptcy isn't designed to make you start over from scratch. Going through bankruptcy and losing some of your assets is hard enough that the courts don't seek everything you own. Exemptions are there to help you keep some of the things you already own.
1. Your car
Your car might be exempt from Chapter 7 liquidation if it is of a certain value. In 2010, for instance, the value was capped at $3,225. That means that if your car was worth less than that, you wouldn't have to worry about liquidating it. Each state is a little different, with Illinois protecting a car with a value up to $2,400.
2. Your alimony, Social Security or life insurance
Certain incomes, like your alimony payments, Social Security payments or life insurance policies are off-limits in bankruptcy. This helps protect your family and your source of income, so you don't necessarily have to fall back into debt following the finalization of your bankruptcy.
3. Your health aides
Prescribed health aides, like walkers, scooters and other health devices are expensive and sometimes difficult to replace. Fortunately, the courts don't want to see any harm come to your or your family because of repossessing these important medical devices. All professionally prescribed health aids for you or your dependents are protected against liquidation when you go through bankruptcy.
These are just a few of the exemptions you should know about. With so many available, it's possible to address your debt without having to worry about losing the most important of your assets.