Bankruptcy is a common occurrence in the United States. Every year, thousands of individuals and businesses find themselves in difficult financial situations, and don't know how to get out of them without some sort of legal help. It's imperative to find the most qualified person to answer your questions and help you find a resolution to your problems.
Bankruptcy can be defined as the legal inability to pay debts or the state of having been legally declared bankrupt. However, bankruptcy isn't that simple, and it's not for everyone. There are several different types of bankruptcy, including Chapter 7, Chapter 9, Chapter 11, Chapter 12, Chapter 13, and Chapter 15.
There are just as many bankruptcy laws, codes and sections as there are types of bankruptcy cases. Bankruptcy exemption is one aspect of bankruptcy that allows the debtor to hold on to assets such as property, a car, home, land, and many other assets, by claiming them as "exempt" under federal and state exemption laws. With exemptions, the debtor can legally keep property that has been claimed as exempt (or that they purchase back from the Trustee). Currently there are 13 states that follow federal bankruptcy exemptions: Arkansas, Connecticut, the District of Columbia, Hawaii, Massachusetts, Michigan, Minnesota, New Jersey, New Mexico, Pennsylvania, Rhode Island, South Carolina, Texas, Vermont, Washington, and Wisconsin. While bankruptcy exemption may sound simple enough, bankruptcy exemption laws are anything but simple, so it's best to consult with a bankruptcy lawyer.
Typically, when filing for bankruptcy, you will schedule or list your exempt property. This should include a description of the property, specify the law authorizing the exemption and list the value of the exemption and the market value of the property. Market value does not factor in the exemption amount, but allows parties in your case to evaluate your claim-such as a creditor who might object to an exemption.
Within 30 days after meeting with your creditors, they can object to your exemptions, in addition to others interested in your case. If there is an objection, they must prove that you have improperly claimed the exemption.
To determine the amount and the type of exemption you are allowed varies by state and federal law. Exemptions used to be entirely dependent on state law, but more recently, the bankruptcy code attempted to make it more uniform.
The homestead exemption applies to property used as your residence. The federal homestead exemption for cases filed after April 1, 2007 is $20,2000. State homestead exemptions vary widely. Exceptions do apply, including the common situation where someone trades up to a more expensive home and transfers equity to a new purchase. The homestead exemption is also limited if you've used it to delay, defraud, or hinder a creditor.
You can also gain exemption for your automobile. The bankruptcy code exemption for a car or automobile is $3,225. The equity in your car is based on the car's market value, minus any loans you have against it.
Household goods and furnishings in addition to retirement assets are other exemption categories.
A bankruptcy lawyer will have the knowledge and skills needed to help you navigate the maze of U.S. titles, sections, and codes relative to bankruptcy laws and bankruptcy exemptions. Once your bankruptcy lawyer has determined which assets are exempt from bankruptcy, they will oversee your case including filing, administrative tasks, etc. If you decide to move forward with your bankruptcy, a bankruptcy lawyer will explain the risks to you and the impact on your financial future, as well as offer other possible alternatives to bankruptcy. Keep in mind that a bankruptcy lawyer will also have extensive knowledge about debt management.
If you are ready to contact a bankruptcy lawyer to explore the possibility of bankruptcy, get a better understanding of bankruptcy exemptions or even to explore other debt relief options, visit the American Bar Association (ABA) website. The American Bar Association website features a convenient lawyer locator function, which allows the user to search bankruptcy lawyer profiles in your local area. Access to the site and profiles is free.
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