Chapter 7 bankruptcy requires for the liquidation of debtor’s assets in order to pay back money owed to debtors. Nevertheless, the government allows individuals to retain certain belongings which are referred to as Exempt Property, while other assets, known as Non-exempt property, are automatically placed in the hands of a court trustee to be sold off. While specific exemptions and values vary from state to state, the following is a general listing of exempt and non-exempt property for individuals filing Chapter 7 bankruptcy:
Exempt Property:
1. Home Equity, up to a certain value.
2. Motor Vehicles, up to a certain value.
3. Household Appliances.
4. Household furnishings deemed reasonably necessary.
5. Clothing deemed reasonably necessary.
6. Jewelry, up to a certain value.
7. Earned wages not yet paid, up to a certain value.
8. Tools used by the debtor as part of his profession, up to a certain value.
9. Pensions.
10. Government assistance: welfare, social security, unemployment.
11. Compensation awarded due to personal injury.
Non-Exempt Property
1. Cash, stocks, bonds, bank accounts, and other investments.
2. Family heirlooms.
3. A second motor vehicle.
4. A second home.
5. Expensive musical instruments that are not necessary for the debtor’s profession.
6. Personal Collections: coins, stamps, or other valuable items
7. Belongings deemed not reasonably necessary or that exceed determined values.
Please remember that before you make any decision about filing any form of bankruptcy you should consult with a profession. He or she will be able to explain your options to you in a more thorough manner. This will help you become more informed about all of you debt management options and possibly prevent you from making a decision that you might regret in the future.
Scott Wallitsch is a financial consultant for DebtorSolution. To find out more about Chapter 7 Bankruptcy, visit our website or email us at Info@DebtorSolution.com.
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