When a person files Chapter 7 bankruptcy, they often have to give up some property in order to receive financial relief. However, many people do not realize that they can file under Chapter 7 and still keep many kinds of personal property. With a strong legal strategy and careful planning, a bankruptcy can offer struggling individuals and families a fresh start in a difficult season.
Most of the property that a person may keep under Chapter 7 is essential in some way or another, but the law is sometimes flexible about what qualifies as essential. If you believe that bankruptcy may offer the relief that you need right now, it is wise to understand what you may have to sacrifice and what you may be able to keep. A strong bankruptcy strategy is an important part of the bankruptcy process, allowing you to understand the risks and potential complications so that you can keep your rights protected.
Kinds of exempt property
Depending on your circumstances, bankruptcy allows or partially allows several kinds of exempt property. Some kind of property you may keep entirely, and some are exempt up to a certain threshold. These thresholds depend on your financial circumstances and other factors. Exempt categories include:
- Household goods and furnishings
- Personal vehicles
- Household appliances
- Tools used for work
- Pension earnings
- Some portion of unpaid earned wages
- Equity in a home
- Compensation received from a personal injury claim
- Public benefits, including benefits accumulated in an account
If you have property that falls into these categories, you may be able to keep some or all of it and still receive significant financial relief.
Protect yourself with careful planning
There are many pitfalls throughout the bankruptcy process, so it is important to chart your course in detail before you begin. Without a strong understanding of bankruptcy, it is common for a person seeking financial relief to violate the rules of the process and make their circumstances even worse.
To make full use of the strength of the law and keep your rights and priorities secure, you must build a strong bankruptcy strategy. Make sure to use high-quality resources and guidance as you need them, to ensure a smooth transition as you move towards a fresh financial start.