Bankruptcy exemptions are an important part of the bankruptcy system. In Chapter 7 bankruptcy, exemptions determine what property you get to keep, whether it be your home, car, pension, personal belongings, or other property. If the property is exempt, you can keep it during and after bankruptcy.
What property can I keep after I file bankruptcy? Many people worry that they will lose everything they own after they file bankruptcy. In reality, most people can keep most of their property and many people keep all of their property. The property you keep depends upon the kind of bankruptcy you file and the state in which you live.
One of the myths that circulates about bankruptcy is that you lose everything you own when you file bankruptcy. Not so! One of the basic ideas of debtor/creditors rights in this country is that, no matter how much they owe, debtors can retain certain property for basic living or a fresh start.
In a Chapter 7 bankruptcy case, you keep all property which the law says is either “excluded” or “exempt” from the claims of creditors. In a Chapter 13 bankruptcy, you keep everything you want so long as you can make the necessary monthly payments to pay your creditors the unprotected value of the assets you wish to keep.
If you want to keep a car in Chapter 7 bankruptcy, you’ll be able to protect, or exempt, a certain amount of vehicle equity. If you financed the car, you can redeem it or reaffirm your contract. Or, you can let it go back to the bank and wipe out any debt that you owe.
To discuss what you can keep and any other aspect of filing bankruptcy in a free initial consultation, call 203-286-4121 or e-mail us. Balbus Law Firm is a debt relief agency. We help people and businesses in New York and Connecticut file for bankruptcy relief under the Bankruptcy Code.
What Are Bankruptcy Exemptions? Congress realizes that you need certain things in order to make a fresh start after a bankruptcy. This is where exemptions come in. Exemptions allow you to keep some or all of your property in a Chapter 7. How much property you can exempt differs depending on which state you live in.
You can keep your exempt property and anything you obtain after the bankruptcy is filed. However, if you receive an inheritance, a property settlement, or life insurance benefits within 180 days after your bankruptcy, that money or property may have to be paid to your creditors if the property or money is not exempt.
Bankruptcy attorneys have heard the question “what can I keep after filing bankruptcy?” hundreds, if not thousands, of times. There is a pervasive misconception in our society that bankruptcy will cost you all of your most important possessions.
Chapter 13 Bankruptcy. If you’d like to stay in business, you might have a better chance doing so if you qualify to file for Chapter 13 bankruptcy. If the business has value or assets that you can’t exempt, you can pay that value to your creditors over a Chapter 13 three to five-year repayment plan.