Filing for bankruptcy can be scary – especially when you’re concerned that you may need to give up something irreplaceable. With bankruptcy exemptions, you are able to protect a certain amount of your assets.
Bankruptcy Exemption Basics
When you file for Chapter 7 bankruptcy, you give the bankruptcy trustee the power to sell your assets in order to pay off your debts. By making an asset “exempt,” you’re telling the trustee that they cannot sell that specific item. If you cannot exempt the full value of an asset, your trustee will still be able to sell the property, but will need to repay you the amount you were able to exempt.
Chapter 13 bankruptcies work differently because you are able to keep all of your assets, but you use a repayment plan to pay your creditors the value of your nonexempt assets. Claiming an asset as “exempt” can ultimately save you money in a Chapter 13 case.
Bankruptcy exemptions vary from state to state, and you may be able to exempt the full value of the asset, or only a portion of it. Brooklyn bankruptcy attorney Michael F. Kanzer & Associates, P.C. can help you determine what items qualify for exemption.
Federal Bankruptcy Exemptions vs. Federal Non-bankruptcy Exemptions
Federal bankruptcy exemptions are part of the Bankruptcy Code, but may not be available in every state. Congress leaves it up to the state to decide what exemptions they accept.
Federal non-bankruptcy exemptions are additional exemptions that you may be qualified to claim, although these exemptions are typically only available to certain occupational groups.
Keep in mind if multiple exemptions are available to you, you are not able to use both federal bankruptcy exemptions and federal non-bankruptcy exemptions. Our bankruptcy law practice can help you decide which is best for your situation.
While there are many different exemptions specific to the assets you may want to protect, such as your car or your home, there may be an asset you wish to protect that doesn’t have it’s own exemption. In this case, a wildcard exemption may be able to protect your asset. Additionally, if you are unable to protect the full value of an asset, a wildcard exemption could help you cover the remaining value.
Contact a Brooklyn bankruptcy attorney at Michael F. Kanzer & Associates, P.C. to see what exemptions you may qualify for, and for all your other bankruptcy questions. We have helped hundreds of individuals discharge their debts by providing our clients with expert protection against Chapter 7, Chapter 11, Chapter 12, and Chapter 13 bankruptcy for more than a decade.