If you’re like most people who are struggling with debt, then you’re probably worried about how you’re ever going to find the financial stability that you want. You might be considering bankruptcy, but you might have a perception that those who pursue bankruptcy are left with nothing once everything is said and done.
This is a common misconception. The truth of the matter is the bankruptcy process can provide you with strong debt relief while still leaving you with the financial resources that you need to be stable and focus on rebuilding your wealth. One way that the process allows you to do this is through bankruptcy exemptions.
What are bankruptcy exemptions?
Bankruptcy exemptions allow you to remove certain assets from the bankruptcy process. Therefore, in a Chapter 7 bankruptcy where many of your assets will be sold to pay off creditors, your exempt property will not be sold.
You’ll get to keep these assets once the process has fully played out so that you can have resources to draw from as you move into the next chapter of your life.
What bankruptcy exemptions are available to you?
Although some states allow you to choose between state and federal bankruptcy exemptions, California requires you to use state exemptions. That said, there are two systems. One favors those who have a significant amount of home equity, while the other favors those who don’t have a lot of home equity.
Let’s take a quick look at the first system, the one that favors those who have a lot of home equity. Under this system, you may be able to claim the following exemptions:
- Home equity up to $600,000
- More than $3,000 in vehicle equity
- Nearly $10,000 in jewelry and family heirlooms
- Nearly $2,000 that’s in your bank account
- 75% of your wages that were earned in the month leading up to the filing of your bankruptcy petition
- Multiple retirement accounts, including IRAs and 401(k)s
- Nearly $10,000 in tools of the trade
As you can see, these exemptions can give you a strong foundation to stand upon once your bankruptcy is complete and you’ve rid yourself of debt. And these aren’t even all of the exemptions that you might qualify for.
Therefore, if you’d like to learn more about what the bankruptcy process can do for you, then you might want to consider reaching out to a legal professional who is experienced in handling bankruptcy cases.
Do you have other bankruptcy-related concerns?
If you’re considering bankruptcy, then you’ve probably got a lot of questions. And you might be concerned about the long-term financial implications of pursuing bankruptcy, such as the hit that your credit might face.
While it’s true that you might face some challenges in light of your bankruptcy, there are ways to rebuild your credit and secure the financial resources that you might need. You just have to learn more about the process, what it can do for you, and how to navigate it to your advantage.
Legal help if you need it
There’s a lot that goes into the bankruptcy process. If you can successfully navigate it, then you can come out the other side in a stronger financial position with the fresh start that you need. If that’s something that you’ve been looking to claim for a long time, then now is the time to take action to secure your future.