If you’re considering bankruptcy, chances are you are already familiar with the pressure of looking around at what worldly possessions you have and wondering if you will have anything left by the time you get to the other side of whatever difficult season you are in. The good news for those who are concerned that they will be left homeless with barely the shirt on their backs is that the law allows for those who file for certain kinds of bankruptcy to retain some of their belongings under bankruptcy exemption statutes.
If you choose to pursue a Chapter 7 liquidation process to absolve yourself of debt, you are certainly facing some hard choices and will need to forfeit many of your belongings — but probably not everything, depending on what you still have to liquidate. Under Chapter 7 liquidation proceedings, the debtor surrenders much of his or her property to a special trustee who is tasked with disposing of or otherwise managing the property to achieve maximum payoff to the debtor’s creditors. Some kinds of property are granted exemptions, or exemptions up to a certain value.
So what is allowed the liquidation exemption? Possibly many things, if the case is handled carefully. You may be able to exempt motor vehicles, “necessary” clothing, appliances, furniture and even some home equity. You may also be able to exempt other more surprising things — jewelry, tools or instruments that are considered necessary for your work, pensions and public benefits and even damages from a lawsuit.
All of these are possible, but only up to certain values. Also, it goes without saying that bankruptcy is not a simple procedure and requires a very careful approach to maximize its benefits for the debtor. If you are considering using a bankruptcy procedure, the guidance of an experience bankruptcy attorney will help you make the most of what you have left and keep more of it, while ensuring that your rights and dignity are not one of the things you surrender.