When debts become overwhelming, most people know that bankruptcy is an option. Yet, many filers worry about having to sell off their assets as part of the Chapter 7 bankruptcy process.
You should know that the court deems some property as either exempt and nonexempt. You may be able to hold on to what you have, depending on its classification.
What is nonexempt property?
A trustee may deem stocks, bonds and savings that you have in a bank account as nonexempt assets. They may classify any secondary homes or cars, musical instruments, valuable art and stamp or coin collections much the same way.
What might the bankruptcy court deem as exempt property?
The trustee presiding over your case will generally group any everyday necessities into an exempt category. The bankruptcy court may exempt any government assistance such as Social Security or unemployment benefits, personal injury settlements, unpaid wages, pensions and some of your home’s equity as exempt property as a result.
The court will likely see your primary vehicle, your household appliances and furniture, clothing, jewelry and any tools or equipment you need to carry out job-related tasks as exempt property as well. The individual values of each of these mustn’t surpass the threshold established by the court, though.
How can you decide if bankruptcy is right for you?
The decision to file bankruptcy isn’t one that you should take lightly. There are long-term implications associated with filing for bankruptcy that you need to explore. A bankruptcy law attorney will want to know more about your financial situation before advising you what debt relief option may be best for you to pursue here in Inverness.