Exemptions in Bankruptcy

Bankruptcy exemptions are the laws that endow a person with the protection of a property in the bankruptcy. Even when you have not filed any bankruptcy, you can still avail of the bankruptcy exemptions. When you file Chapter 7 bankruptcy, and you do not claim the exemptions or opt for the wrong one, then the bankruptcy trustee has the right to control your property.

Bankruptcy Exemptions:

More than 95% of the bankruptcy filers can use the bankruptcy exemptions to protect their property. The bankruptcy exemptions allow the bankrupt people the chance to start their life afresh after clearance of their debts without loss of their property.

Who Can Use Exemptions:

The bankruptcy exemption laws are only for protecting the general populace, and therefore, only individuals can benefit from exemptions. If a business holder gives the application for a Chapter 7 bankruptcy case, the property either goes to secured creditors. Otherwise, the court sells the same to pay the unsecured creditors.

Spouses Can Opt For Bankruptcy Exemptions:

Whenever a married couple files for the bankruptcy under a joint petition, both spouses get the right to apply for exemptions, too, individually for their property.

How to Claim Exemptions under Bankruptcy:

To claim the exemptions under bankruptcy, one needs to opt for Schedule C, a form submitted to court while filing for bankruptcy.

Types of Property That Fall under Bankruptcy Exemptions:

• Health aids
• Life insurance
• Real estate home property
• Trade tools
• Personal property
• Personal injury
• Social Security benefits
• Alimony
• Veteran benefits
• Unemployment benefits as well as compensation
• Retirement accounts

After all these, the wildcard exemptions protect the property that does not come under the above list. There are no limits to any other exceptions under bankruptcy except personal property and real estate homes (limited to a specific amount).

If you would like more information about bankruptcy exemptions, contact a McAllen bankruptcy attorney.