One of the first tasks faced by a Rockland County resident who has decided to file a Chapter 7 bankruptcy petition is choosing between exemptions provided by the United States Bankruptcy Code or New York law. The two lists are different from each other, and choosing the list that best suits the debtor's financial circumstances can be crucial. Some exemptions are better known than others. For example, New York law allows a debtor to declare up to $10,000 of value in real estate as exempt, whereas federal law limits the exemption to $15,000. If real estate constitutes a person's largest asset, this difference alone may determine the choice. However, many debtors do not own a home, and the lesser known exemptions may be more important.
When a resident of Rockland County contemplates filing a bankruptcy petition, one of the first questions asked is whether creditors can seize the person's residence, automobiles, retirement plans or other assets. In most cases, debtors will not be required to surrender their personal assets in a Chapter 7 bankruptcy proceeding. Assets subject to this protection are generally called "exemptions." The rules governing the designation of exempt assets are complex, but this post will provide a useful overview.
One of the pieces of property a New York family who is struggling financially is most likely to want to hang onto is the family home. For these people, New York's homestead exemption is very important to understand, as it can help a family protect their residence even through a bankruptcy.
As a previous post on this blog discussed, Rockland County, New York residents who find themselves in financial difficulties can protect a lot of their retirement savings, at least the savings in qualified accounts like a 401(k) or an IRA, from creditors who may otherwise come after their bank accounts and other valuable assets.
Many people in Rockland County, New York, particularly those who have a consistent work history, are likely to have some or even a large portion of their wealth wrapped up in a retirement plan like a 401(k) or an IRA. The idea behind these plans, which often come with tax incentives, is to encourage people to save money for retirement.
A previous post on this blog overviewed how bankruptcy exemptions work to help a Rockland, New York resident who is struggling with debt keep some of his or her property even after going through a bankruptcy. These exemptions are very important to Garnerville and Rockland County residents, as they enable a person to get a fresh financial start without winding up destitute.
This blog has previously discussed how, during the bankruptcy process, a Rockland resident can choose whether he or she wants to take advantage of either the state exemptions or federal exemptions set out in the bankruptcy code.
When a person cannot pay their bills and experiences the pressure of living with overwhelming debt, bankruptcy can be a good option for finding their way back to solid financial footing. However, not all debts can be discharged under a Chapter 7 or Chapter 13 filing. While bankruptcy exemptions may allow a Rockland resident to protect some of their property during the bankruptcy process, that property may later be used to satisfy an unpaid child support obligation or other nondischargeable debts in bankruptcy.
Every person's path to bankruptcy is unique. Residents of Garnerville may find themselves contemplating the bankruptcy court's protections because of unforeseen expenses, changes to their life plans or simple financial mismanagement. As different paths to bankruptcy may require individuals to make different considerations about their future goals, readers of this post are encouraged to discuss their needs with their personal bankruptcy attorneys and not rely on the content of this post as legal advice.
Readers of this Garnerville bankruptcy law blog likely know that bankruptcy is more than a single step process. In fact, there are many different forms of bankruptcy that consumers and businesses may use to pull themselves out of financial peril. Depending on the circumstances of an individual or company's case, it may benefit from one form of bankruptcy more than another. However, knowing which form of bankruptcy to use can be difficult to assess.