“One of the most common types of bankruptcy is chapter 7 bankruptcy”, says Bert Briones, an Irvine bankruptcy attorney. “In this, a person’s assets are sold off in order to cover their debts.” The property to be sold is surrendered to a bankruptcy trustee, who then goes about the process of liquidating the assets to get the money needed to pay off debts. Not all property is eligible for liquidation, and filers can claim exemptions for certain assets that will prevent them from being surrendered and sold.
Federal and state laws list certain types of property that a person can claim as exempt. In some cases, your home state may choose to allow you to decide whether you want to abide by state or federal regulations regarding exemptions. In general, it’s a good idea to go with whatever set of regulations allows you to claim more of your property as exempt.
As a rule, you are allowed to keep the tools of your trade, clothing, and everyday household goods. Household goods include things like appliances, books, furniture, and pets. Under federal regulations, you can also claim unlimited exemptions for healthcare goods like wheelchairs, breathing machines, and at-home care equipment. If you are filing for bankruptcy jointly with your spouse, many exemptions can be doubled.
Property isn’t the only area where exemptions can be claimed. You can claim exemptions for things like alimony, wrongful death trusts, unemployment, veteran’s benefits, public assistance, and social security. Disability insurance, immature life insurance policies, and life insurance proceeds can also be exempt.
Be aware that creditors can attempt to contest your exemptions. When you meet with your bankruptcy trustee about a month after filing, your creditors may attend, too. At this point, they can try to argue against the property you’ve claimed as exempt, to make it eligible for sale.
Regulations for bankruptcy exemptions and the filer’s ability to choose federal regulations over state regulations varies from state to state. Before you file for bankruptcy, discuss your options with a good bankruptcy attorney, so you can begin to decide which pieces of your personal property you wish to claim as exempt.
If you have questions regarding Chapter 7, Chapter 11, or Chapter 13 bankruptcy, lien stripping, wage garnishment, cram down, foreclosure, asset protection, or related issues, please call Red Hill Law Group PC, to schedule a no-charge face-to-face or phone consultation with an experienced Orange County bankruptcy lawyer.
We can be reached at 877-343-3289, or please use our contact form and you will be contacted within the next business day.
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