Unbearable debt is becoming a more and more common problem throughout the country, for people in every walk of life. The good news for those drowning in debt is that the law offers legal ways to discharge debt through bankruptcy, but the process is still unclear to many people.
A poor public opinion has hung around bankruptcy for many years, despite the fact that it is a perfectly legitimate procedure protected by the law. This bad reputation contributes to the many misconceptions that the public has about bankruptcy. Among other things, many people believe that bankruptcy means losing all of your property, but this is usually not how a bankruptcy actually plays out.
If you are considering a bankruptcy, then you probably know that it has two typical forms — Chapter 13 repayment plans and Chapter 7 asset liquidation. Chapter 7 makes up the majority of bankruptcies. Although it does involve turning over many of your assets to a trustee tasked with selling them to make up some or all of your debt, many types of property enjoy exemptions.
Many people do not know that the law offers exemptions for certain types of monetary assets, depending on your circumstances. Specifically, some types of retirement savings or investments can stay protected in a bankruptcy, but not always.
An experienced bankruptcy attorney can help you examine the details of your exact circumstances to determine what you can reasonably expect to exempt in your Chapter 7 procedure.
Physical property exemptions
In many cases, A Chapter 7 liquidation does not mean that you must turn over all of your property. In very broad strokes, the law does not expect you to go without basic living needs to accomplish a bankruptcy procedure.
Practically speaking, this means that you may not have to turn over your home or other property. While the specifics depend on your individual circumstances, saving your home from bankruptcy is often possible through a state or federal homestead.
Other types of property may also qualify for exemption, such as a vehicle that you use to travel to and from work or need for other vital tasks. You may also qualify for exemptions around certain family heirlooms or specific tools that you use for work.
Each person’s circumstances differ slightly, but those small differences can have big implications on what you can or cannot exempt under Chapter 7. If you believe that you are ready to move forward with a bankruptcy, be sure that you fully understand the nuances of the law and the bankruptcy process here in Tennessee.
If you need help identifying all your available exemptions or understanding the bankruptcy process, an experienced bankruptcy attorney can help protect your rights and interests.