People postpone filing for Chapter 7 bankruptcy because they fear losing everything they have worked so hard to acquire. But most people who file for Chapter 7 bankruptcies do, in fact, get to keep their cars and homes and household items.
Learn more below about the bankruptcy exemptions available for Chapter 7 filers.
These exemptions shield filers
Simply knowing that it’s possible for debtors to retain these important resources and still walk away with a clean financial slate should provide relief to those considering filing a case. Here are some exempt assets and resources:
- Unemployment and Social Security benefits
- Retirement savings
- Alimony and/or child support
- Personal injury compensation
In some cases, it may even be possible to hold onto some savings. Making the most of your exemptions can allow you to turn over a new fiscal leaf in a few short months.
Keep the tools you need for survival
Ideally, clearing your debts via bankruptcy paves the way to responsible money management and debt avoidance. To move forward, you must be equipped with all you need to work and earn a living. Keeping the tools of your trade allows you to do just that.
Filing for bankruptcy should alleviate the life stressors you face, never worsen your worries. Learning more about the exemptions you’re allowed is the first step in that direction.
Claiming bankruptcy exemptions
The Schedule C form is where all assets and resources must be listed if they are to be exempted. All property not on Schedule C is subject to seizure and liquidation to satisfy creditors.
Most debtors considered “asset-free”
Approximately 95% of those who file under Chapter 7 fall into the “no-asset” category. This means they have no non-exempt assets that can be sold to repay debts.
Trustees also have the discretion to look the other way on assets that may exceed the exemption if the process of valuating and liquidating the asset would prove to be onerous.