What Assets Are Exempt in Chapter 7 Bankruptcy?

Everyone needs a second chance from time to time, and a Chapter 7 bankruptcy filing can provide it. Also known as liquidation bankruptcy, Chapter 7 forces you to sell all your assets to repay your debts.

But you won't be left with only the shirt on your back. Some assets are exempt from Chapter 7's liquidation requirements, and those assets can remain in your possession. If you're on the fence about filing for bankruptcy, knowing which assets will stay and which will go can help you make that final decision.

The Craig Black Law Firm helps Atlanta residents as they navigate the bankruptcy process. If you're considering filing Chapter 7, I can help you through the process. Give me a call at 678-888-1778 or fill out my online form, and I'll be in touch.

What Are Chapter 7-Exempt Assets?

Chapter 7 bankruptcy helps debtors get out from underneath crushing debt. As part of your filing, you'll need to provide a list of your assets and liabilities, with the understanding that those assets will be seized to repay your debt.

But not all your assets are up for seizure. The courts want you to be able to continue to earn a living and put food on the table. For that reason, some assets will be set aside as exempt, which means the courts won't touch them.

Which Assets Are Exempt?

Exemptions are set at both the federal and local levels, so your exemptions could vary from someone who lives in another state. Generally speaking, though, the following will qualify as exempt property:

·        Your home, subject to a certain amount of equity

·        Your car, up to a certain amount of value

·        Clothing and qualifying jewelry

·        Certain household items

·        Certain work-related items

·        Spousal or child support

·        Qualifying insurance benefits

·        Qualifying public benefits

·        Qualifying personal injury awards

Judges use the law as a guide but exercise discretion in deciding which assets to order seized. Things can get complicated when an asset like your car is tied to some of your debt, but it's still the goal of the courts to leave you with the assets necessary to continue to earn a living.

Some cases are labeled “no-asset bankruptcies.” In those circumstances, the judge may allow you to keep the vast majority, if not all, of any assets you own. These cases can be disappointing to creditors, as the bankruptcy filing fails to produce any funds to give to them.

How the Craig Black Firm Can Help

Are you considering filing for bankruptcy? An attorney can help you navigate the process, from making the initial decision to appearing in front of the judge on court day. The Craig Black Law Firm takes a personalized approach to bankruptcy filings, crafting a solution that's customized to each client.

I can review your situation and recommend the best course of action, whether it's Chapter 7 or another option. I'll also help you compile your list of assets and file with the court. To discuss your situation, contact me at 678-888-1778 or complete this online form and offer some details about your case to see how I can help.