November 3, 2023
- Categories:
- Bankruptcy
Chapter 7 bankruptcy can be a straightforward process, but it might become more complex based on the circumstances. Ideally, a debtor can quickly determine what properties have exemptions, potentially allowing them to keep some of their belongings. However, specific laws for categorizing nonexempt property could make it challenging to know what the debtor may lose.
This bankruptcy type classifies property into two categories: exempt and nonexempt. The law typically allows the debtor to keep exempted property or necessities to ensure they can live decently after paying off their creditors. Still, there are rules putting limitations on exempt property values. All the debtor’s properties may fall under nonexempt unless they make a claim. After confirming what assets are exempt, the process moves forward, liquidating nonexempt properties left to settle the debt.
There are no specifications when determining what properties can be exempt. The typical rule to help differentiate between asset categories is whether the debtor needs them for a fresh start after finalizing the bankruptcy. Exemptions can apply to a wide variety of assets, such as real estate, appliances, furniture and vehicles. But even if the debtor claims exemption, their belongings might still be nonexempt if they are valuable items that are not essential, such as collectibles, vintage items and other luxury assets.
Seeking help when facing Chapter 7 bankruptcy
This bankruptcy type can be overwhelming, especially when dealing with loose exemption definitions. Even if they can keep some of their assets, it can be challenging to categorize belongings and determine which are most eligible for exemption in compliance with law limitations. Fortunately, debtors can seek experienced bankruptcy legal counsel, helping them navigate the process and resolve issues that could arise.
Attorney Brad Hawley
Attorney Brad Hawley possesses years of practical experience focused on bankruptcy, civil and criminal defense. He has prosecuted and defended clients in state court, and is a former enlisted member of the United States Army. Brad is driven by his desire to help people that have been hurt by the legal system, and is dedicated to fixing injustices he sees around him. [ Attorney Bio ]