Chapter 7 bankruptcy can provide debt relief and protect certain property belonging to the filing party at the same time. Although bankruptcies in one part of New York recently hit a low, Chapter 7 bankruptcies continue to be the majority of filings in the area. The recent bankruptcy filings number is the lowest number since 2005. Bankruptcy numbers throughout the country have declined since 2009. Several factors contribute to the decline. Some of those factors include consumer reluctance to take on new debt and consumers eliminating existing debt.
For those who continue to struggle with debt, different options may be available to consider. One option to consider is consumer bankruptcy through a Chapter 7 bankruptcy filing. Chapter 7 bankruptcy allows those who qualify to liquidate debt to repay creditors and enjoy debt relief. Filing for liquidation bankruptcy, as Chapter 7 bankruptcy is sometimes known, may make some individuals considering bankruptcy and struggling with debt uneasy.
This should not necessarily be the case because individuals filing for bankruptcy are not expected to begin entirely anew after a bankruptcy proceeding; as such, certain assets are protected and are considered exempted from the bankruptcy process. Typically, there are both state exemptions and federal exemptions a party may use to protect certain property from the liquidation process. Bankruptcy exemptions such as a jewelry exemption, car exemption of homestead exemption may relieve potential anxiety a filing party may feel. Exemptions such as the homestead exemption and car exemption can protect a certain amount of equity in a home or value built up in a vehicle. Exemptions, however, are subject to maximum values but wild card exemptions may be available for property that exceeds allowable value for an exemption category.
Because there are rules and requirements to follow to both file for Chapter 7 bankruptcy and correctly apply bankruptcy exemptions to protect certain property belonging to the filing party, it is important to understand the bankruptcy process. A keen knowledge of the process may better allow the filing party to enjoy a debt-free future.
Source: Buffalo Business First, "WNY bankruptcies at lowest in decade," Allissa Kline, July 1, 2014