Debt is often a more or less stressful situation and it feels lonely at times when one gives up paying for the debts. The benefits of filing for bankruptcy are that it provides an individual with the opportunity to start anew even though the legal procedures of bankruptcy are not easy. This is where help from a lawyer would be of great assistance. Here, the goal of this blog is to offer you simple information about the assets you tend to be able to maintain bankruptcy, which is the most usual one for individuals.
What are Exemptions?
Exemptions are legal provisions that protect certain resources from being seized to satisfy the debts owed to creditors. These, of course, can be state-specific, but there are also general federal exemptions which include all states. In other words, exemptions define a monetary limit on the specified properties so that you can keep them no matter your bankruptcy status.
What assets are eligible for exemptions under the laws governing personal bankruptcy?
- Essential Needs: These include articles that people make use of daily or require regularly in their day-to-day activities. Normally, it covers the owner’s main home and a specific amount of the home’s equity, personal effects (furnishings, clothing, personal property), and a vehicle needed for business or other business-related purposes.
- Tools of the Trade: Some exemptions preserve tools and equipment which you use in your line of duty and Which assures you that you will continue earning your living.
- Retirement Savings: Luckily, most retirement accounts can secure forms of IRA, 401(k), pensions, etc., from the reach of a debtor in bankruptcy. This helps protect your future earnings from depletion.
- Public Benefits: Some of the other forms of social security including the social security benefits, welfare and unemployment benefits are usually not eradicable by bankruptcy.
What happens to non-exempt assets?
Assets which on the face of them are valued more than these exemption limits or which are not ineligible for exemption are classified as non exemption. The appointed bankrupt estate officer could dispose of these items with an intention of recovering portions of the amount owed to your creditors.
Conclusion
Bankruptcy could therefore be viewed as organizing and providing a way for those who are in some measure of trouble financially. Whether you are thinking of declaring bankruptcy or not, it is always beneficial to know about your exemptions and seek help from an experienced attorney to whom you can explain the case and know as to what property or amount you can retain or not. Kindly note that this is more of a generic blog, always consult the services of a lawyer in regard to your particular circumstances.
