New Yorkers Use Exemptions to Keep Property in Bankruptcy
Aug. 27, 2014
Chapter 7 bankruptcy is designed to give consumer debtors fresh starts on financial freedom. This freedom is achieved through liquidating the debtor’s assets and using the proceeds to pay off creditors. Though Chapter 7 bankruptcy can give debtors a way to get out from under their financial burdens it can also induce fears in those who want to keep at least some of the real and personal property items.
Bankruptcy laws recognize that completely reducing a debtor’s assets can create more harm in the debtor’s life. For this reason some items of property are protected in Chapter 7 bankruptcy. These protected items are exempt from liquidation and debtors may keep them if they qualify.
In some cases a person’s residence can be exempt under a homestead exemption. Additionally, vehicles can be exempt up to a certain dollar value. Finally, articles of personal property, such as jewelry, home appliances and other items can also sometimes be protected through exemptions. Bankruptcy law sets the monetary amount up to which exemptions may be exercised.
Bankruptcy exemptions provide debtors with the opportunity to hold on to some of their possessions in order to start in a solid financial place when their legal proceedings end. Not all property can be exempt and as mentioned limits do exist as to how much a person can protect from Chapter 7 liquidation. Bankruptcy lawyers can advise their clients on the details of seeking exemptions in New York.
Bankruptcy is a significant legal undertaking that forces individuals to realistically acknowledge their financial problems. Chapter 7 is just one way that financial freedom can be achieved. Other legal bankruptcy options exist that debtors can explore to learn about their alternatives.