Experiencing financial struggles or dealing with past-due balances can lead to a debt problem that an applicant cannot hope to manage on his or her own. This is why it may be prudent to consider the benefits of Chapter 7 bankruptcy, an option that will allow one to discharge certain debts and secure his or her financial future. While this is liquidation bankruptcy, filing for Chapter 7 bankruptcy does not mean one will lose his or her property.
There are certain exemptions that are available to individuals filing for Chapter 7 bankruptcy. Exempt property is not subject to liquidation, which means the applicant can keep these specific assets. Potentially exempt property includes:
- Personal vehicles worth up to a certain value
- Tools of the trade necessary for one’s job
- Necessary food, clothing and appliances
- Jewelry worth up to a certain value
- Pensions and a portion of equity in the debtor’s home
- A portion of earned but unpaid wages
- Public benefits and public assistance the applicant receives
- Damages awarded in a personal injury civil claim
Certain assets are not exempt from liquidation during the Chapter 7 bankruptcy filing. These assets may be liquidated, and the proceeds may go toward the repayment of unpaid debts.
The right way forward
Those considering bankruptcy may benefit from experienced legal guidance. An Alabama bankruptcy attorney can provide counsel regarding the most appropriate way forward for a specific situation. Chapter 7 bankruptcy may allow one to deal with his or her debt while still dealing with certain types of balances once and for all.