What are bankruptcy exemptions?

On Behalf of | Aug 31, 2020 | personal bankruptcy |

When a struggling consumer has made the decision to file for bankruptcy, they may worry about what will happen to their possessions and belongings. It helps to understand how Chapter 7 bankruptcy exemptions can protect some of their property and what personal bankruptcy protection may be able to do to help them.

Chapter 7 bankruptcy exemptions

Chapter 7 bankruptcy exemptions can help protect some of the types of property the filing party may have concerns about. Chapter 7 bankruptcy protections can protect a certain amount of value in a car or motorcycle; a certain amount of equity in a home; and can also protect personal property such as household furnishings, clothing and jewelry. It can also be used to protect tools the filing party uses in their work.

Protections for a home are referred to as homestead protections. There can be both state and federal protections so filing parties should be familiar with what exemptions apply to them and their situation. Additionally, wild card exemptions may be available in situations when the filing party has reached a limit for an exemption category or for property they want to protect that does not fall into a specific category.

Debt relief through bankruptcy

Personal bankruptcy protection can provide debt relief to struggling consumers. There are different types of personal bankruptcy that can help filing parties in different situations and circumstances. Those considering bankruptcy should understand the different options available to them, and how they will be protected, so they can select the best option for their needs and goals for the process. Struggling with overwhelming debt day after day can be challenging and stressful which is why those facing that situation should understand the different types of relief that may be available to them.