When you file for bankruptcy to get rid of your debts, there are certain assets that you can protect. This takes place due to the exemptions provided in bankruptcy to debtors. Both federal and state government offer different exemptions for individuals filing for bankruptcy. Despite the process of bankruptcy being governed by federal laws, lawyers of Dallas based bankruptcy law firm Recovery Law Group state that you can choose between the federal and state exemptions. Certain exceptions are common in both federal and state exemptions; however, their amount varies from state to state. These include:
- Homestead exemption
- Personal property
- Living expenses to support your family
- Certain retirement accounts
- Wild card exemption up to a specified dollar amount.
The dollar amount changes every three years to cater for rising prices.
In different bankruptcy chapters, the fate of non-exempt property varies. In Chapter 7 bankruptcy, the non-exempt property is liquidated by the bankruptcy trustee and the money is distributed amongst your creditors. Usually, people who end up qualifying for Chapter 7 rarely have a non-exempt property which can be sold off. After 3-6 months, your qualified debts are discharged in this case.
In case, you do not want to part with a non-exempt property, you can choose to file for Chapter 13 bankruptcy Dallas. This chapter allows you to keep your assets while making court-approved payments towards clearing your debt over a 3-5 years’ period. After completion of the plan, any remaining unsecured debts are discharged.
In case you have doubts regarding which property is exempted or which exemption will be most beneficial for you, you should consult with expert bankruptcy lawyers at 888-297-6023.