When you file for bankruptcy there are a lot of intricate laws and codes that you must pay attention to.
It is always better to obtain advice from a lawyer to help you wade through all the complications.
However, when you file for bankruptcy and depending on what type is filed, there are some exemptions as to what you must liquidate under the law.
Bankruptcy Exemptions Can Change By State And Country
These exemptions change from state to state so it is important that you find the exemption codes for your state. There are a few guidelines that most states follow and the exact details of the amounts of the equity that you are allowed to have in these assets is the variable between states.
The homestead exemption is most commonly offered when you file for a chapter 13 type bankruptcy. The amount of equity that you are allowed to have in the home is the determining factor if you can or cannot qualify for the homestead exemption. The amount of equity varies from state to state.
Your Automobile May Be Exempt
There is also an exemption for your automobile but again the amount of equity that you are allowed to have in the car regulates whether or not it is exempt. Often times you are able to transfer some wild card exemption amounts to the equity of your car. One of those are the equity amounts that you are allowed for tools of trade.
Your household goods and furnishings are exempt up to a certain amount. Because of the low resale value of these types of goods, the trustee is unlikely to see the liquidation of these items as a real way of paying back the creditor. For this reason they are usually exempt.
Any Retirement Funds May Also Be Exempt
Your retirement funds can also be considered exempt. These include 401k’s, stocks, pensions, IRA’s, and profit sharing plans. As with all assets that are exempt, there is a maximum amount that is exempt. As stated before it is important that you follow your states exempt codes. Even though there is a federal code in place, many states have opted out and follow their own code for exemptions.
Using the federal amounts is mostly just good to use as a guideline.
It Is Important That you Always Consult A Professional
There is a lot of grey area to exemptions. There are a lot of equity amounts that you can carry from one exemption to another. The process of determining what is exempt is an arduous one and it is important that you consult a professional bankruptcy lawyer to help you determine what is best to liquidate and what is best for exemptions.
More exemptions exist so you should talk to a layer for consultation. There are many aspects of bankruptcy that can be confusing and enter into some grey areas. This is why it is essential to have a trusted legal professional review your case and make some recommendations. The common person is able to understand the basics of bankruptcy but the more detailed the case gets, the more legal jargon is involved and more difficult to understand.
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