One of the questions that comes up often when a person is facing a bankruptcy is what assets they'll be able to keep. There are some very specific federal guidelines that you should know if you're considering a Chapter 7 bankruptcy. This is the form of bankruptcy that doesn't require you to make payments to the bankruptcy trustee, but any nonexempt assets that you have are liquidated to pay off creditors.
The exempt property that an individual can have includes very minimal assets. These assets can also be impacted by state laws so it's best to work very closely with your attorney to find out exactly how these statutes apply to you. For example, the amounts are typically doubled for individuals who are married as long as they file a joint income tax return. Exempt property includes:
- Up to $4,000 for a vehicle
- $25,150 for a homestead
- Up to $13,400 for personal property but this is subject to a $625 limit per item
- Up to $1,700 in jewelry
- Up to $1,325 in property, and up to $12,575 of any unused homestead exemption
- Certain retirement benefits and insurance plans
- Child support, alimony, and public benefits
There are some special considerations when you're trying to determine how some assets will be handled. Your attorney can help you to learn about these so you can make an informed decision.
Individuals who can't live with these Chapter 7 bankruptcy exemptions might find that they will fare better with the exemptions of a Chapter 13 filing. It's imperative that you make decisions based on what you feel is in your best interests. Working closely with your bankruptcy attorney may help you to determine how to seek the financial relief you need.