Non-payment of bills, especially those of credit cards, etc. can result in severe consequences ranging from threatening phone calls, letters to wage garnishments to legal actions. If you wish to protect your assets from going under the hammer, you need to consult bankruptcy lawyers to get you out of this mess. Unlike the myths associated with it, bankruptcy actually offers you a chance to reclaim your life while getting rid of the financial burden of debts.
According to Los Angeles based law firm Recovery Law Group your individual circumstances determine which chapter of bankruptcy to choose. You can opt to get the debts discharged via Chapter 7 bankruptcy or get them reorganized through Chapter 11 or Chapter 13 repayment plan can work best for you. It is important to note that you might have to part away with some property, which may be taken and sold off to pay the creditors. However, Bankruptcy Code exemptions allow debtors to keep some or all of their assets, depending on the situation. These exemptions vary from one state to another. In the state of California, two options are available to debtors:
California Bankruptcy Exemption Option 1
This option is also known as the “wild card” exemption as it has a list of miscellaneous personal property which can be exempted. This option is popular amongst debtors who don’t own a home or possess any equity which requires an exemption. The exemptions in this section include:
- Life insurance up to $11,800
- Equity up to $22,075
- Public benefits like Social Security, unemployment, disability, etc.
- One motor vehicle up to $3,525
- Miscellaneous personal property up to $22,075 (in lieu of equity exemption)
California Bankruptcy Exemption Option 2
This option is also known as “Homestead” exemption and is generally chosen by people who wish to retain equity on their houses. Exemptions included in this section are:
- Motor vehicle up to $2,725
- Jewelry up to $7,175
- Equity up to $75,000 for a single person; up to $100,000 for a married couple and up to $175,000 for special circumstances.
- Personal property used professionally or for a business up to $7,175
Often people can be confused regarding which exemption to choose. Thus retaining a bankruptcy attorney can help you with not just selecting the appropriate bankruptcy chapter but also choosing the most appropriate exemption. With a bankruptcy lawyer by your side who is well versed with the system and the law, you can overcome the dire financial situation.