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Exemptions in a Chapter 7 bankruptcy

| Jul 14, 2020 | Uncategorized

People in Florida who are considering bankruptcy might be concerned that they will lose all their possessions. In fact, even when filing for a Chapter 7 bankruptcy, a number of assets may be considered exempt. Bankruptcy laws vary from state to state and even between jurisdictions, and individuals may want to contact an attorney about their specific situation. However, a person filing for bankruptcy can expect a few main points to be consistent wherever they are located.

Luxury items, such as second homes or boats, are generally considered non-exempt. However, a homeowner who has not fallen behind on mortgage payments and who has a certain amount of equity in the home may be able to file for Chapter 7 bankruptcy and still keep the home. The person may also be able to keep a vehicle depending on its worth compared to the allowed exemption for the jurisdiction.

People are allowed to keep any wages earned after filing, and in most cases, they can keep what they are earning at the time of filing as well. Such items as furniture, appliances and clothes can generally be kept. Retirement accounts are protected from bankruptcy but must be listed in the filing. Items such as collectibles or artwork may not be exempt or could be a “wild card” exception. An attorney may help ensure that assets are properly disclosed.

An attorney may also be able to answer other questions an individual might have regarding bankruptcy. For example, while it is possible to discharge credit card debt and medical debt in a bankruptcy filing, some debts, such as child support and alimony, cannot be discharged. Student loan debt usually cannot be discharged either unless the individual can prove extreme hardship, but what constitutes this extreme hardship is not clearly defined.

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