Chapter 7 Exempt Property

When it comes to claiming bankruptcy, there are actually two different types of personal bankruptcy protection available – Chapter 7 and Chapter 13. Without a doubt, the most popular type of filing is Chapter 7, as it allows the debtor to completely eliminate large portions of their debt within a relatively short period of time – about 6 months. While filing Chapter 7 certainly has its advantages as it pertains to the debtor, it’s also important to understand that certain assets must be liquidated in order to pay back the creditors who are owed. In other words, certain assets that are owned by the debtor are liquidated in order to pay back their creditors.  The following article will discuss both non-exempt and Chapter 7 exempt property.

It makes sense that debtors, whether they be individuals or businesses, are very concerned about the types of assets that might be at risk when filing bankruptcy. An experienced bankruptcy lawyer can help to put things into perspective. To be connected with a reliable attorney in your area, consider filling out our free bankruptcy evaluation.

In order to protect certain assets from the liquidation process, a debtor must file a schedule of exempt property with the bankruptcy court. Exempt property is defined as property that the debtor wishes to protect from liquidation, and a debtor may choose to use either the state or federal exemption laws in determining which items to protect. An experienced attorney can help you decide which set of regulations to follow.

Chapter 7 Non-Exempt Property

Listed below are the items that a debtor must usually forfeit:

•    High dollar musical instruments, unless the debtor uses these instruments to generate income
•    Stamp, coin or other valuable collections
•    Family heirlooms
•    Cash, stocks, bonds or other investments
•    A second automobile (car or truck)
•    A second residence (home or vacation home)

Chapter 7 Exempt Property

Some examples of property that a debtor can keep are listed below:

•    Household appliances
•    Pensions
•    Primary motor vehicles (to a certain value)
•    Jewelry (to a certain value)
•    Necessary clothing
•    Necessary household goods and furnishings
•    Tools used in the debtor’s trade or profession
•    Public benefits (welfare, social security, unemployment)
•    Damages from a personal injury settlement

For more information on the personal bankruptcy rules and regulations surrounding exempt and non-exempt property, consider setting up an initial consultation with a bankruptcy lawyer in your area. Filling out our free bankruptcy evaluation is a great way to get the process started without having to make any firm financial commitments.

Please click on the following link to learn about converting Chapter 13 to Chapter 7.

Click on the following link for a list of the pros and cons of bankruptcy Chapter 7.