When you find yourself in a desperate financial situation where filing for bankruptcy is no longer a choice, then it’s time to shift focus on minimizing your financial losses. You can do this by learning more about the provisions under which you qualify to file for bankruptcy. You can do so under Chapter 7, or Chapter 13, depending on your current financial situation. Each of these provisions come with certain perks, mostly in the form of exemptions.
What is an Exemption?
Exemption or Exempt Assets refers to certain assets that are exempt from being liquidated or foreclosed during bankruptcy. This differs based on what type of bankruptcy you file and where you permanently reside. Let us assume you choose to file for bankruptcy under the provisions of Chapter 7. In this case, your exemptions will determine what property or properties you get to keep. In Chapter 13 Bankruptcy, exemptions are useful for determining how much you may have to pay your creditors under the repayment plan.
State or Federal Exemptions
So, in the most general sense, you get to keep exempt assets during the bankruptcy proceedings and after the final orders are passed. On the other hand, assets that are not exempt can be liquidated by the trustee for the repayment of debts. Although the Bankruptcy Code is a Federal law, the list of exempted assets may vary from one state to another. While some states allow the applicant to opt for exemptions under the Federal or State laws, most of them require you to be content with what the state exempts.
Also, it is important to note that to be eligible to file for bankruptcy in a particular state, the applicant must have permanently resided there for at least two years. If not, there could be some legal hurdles, which only a highly specialized bankruptcy attorney can help you with. It’s always recommended that you hire a bankruptcy attorney to help you plan your assets.
Contact a Dallas bankruptcy attorney today to find out how you can get financial relief.