Bankruptcy Exemptions under Chapter 7
Filing bankruptcy under Chapter 7 allows you to carry on the ownership of certain properties or assets as described under the federal and/or state bankruptcy exemption laws. The petitioner will list all his non-exempt and exempt properties during the bankruptcy process. The finality of which properties or assets are exempted will be stated on the property exemption report filed by the trustee.
Each state has its own exemptions based on state codes it follows. In general, assets which are possible to be exempted includes, but not limited to, life insurance proceeds, health or disability benefits, property of business partnerships, IRAs deposited over 1 year before filing bankruptcy and public employees retirement and disability benefits. For personal property it includes burial plots, books, clothing, furniture and residential condominium deposits. Other assets include wages, homestead and tools of trade.
Chapter 7 bankruptcy is probably the most sought after provision of the bankruptcy law due to the fact that most debts can be discharged using it. However, it is still important to check with a licensed and experienced bankruptcy lawyer on the many other prerequisites and law provisions of Chapter 7 before one file under it.
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