Tuesday, December 27, 2016
How Does A Bankruptcy Exemption Work?
Nearly every type of legal proceeding has its own special terms, and if you are not familiar with the words being used, you can easily become confused. Bankruptcy is one area of law where there are more than the usual list of legal terms that seem foreign, but with a little background knowledge you can feel comfortable talking about your case. For instance, the discharge is what you are seeking when you file bankruptcy. An entry of discharge in your case is what makes your debts no longer due. The automatic stay is the legal mechanism that prevents creditors from contacting you once you file a case. And the 341 meeting is just the informal hearing where you meet the trustee who is handling your case and answer questions about your debts and assets. Another term you will hear a lot is the word “exemption”. This simply means which assets are exempt from a creditor’s reach during your case, and you do have choices when picking your exemptions.
The Bankruptcy Code contains a list of federal exemptions, and you can use these exemptions or you can use the exemptions provided by the state. Every state has a different list, and sometimes the state exemptions are more valuable than the federal exemptions. Some of the more common exemptions include:
● A set value in your vehicle, meaning the value of your car up to that valuation point is exempt from being attached by a creditor.
● A set value in your home, which also means the value of your home, is exempt from creditor attachment up to that value.
● Your personal items, such as clothing and household goods.
● Certain savings and retirement accounts.
● Antiques and works of art.
When you are deciding whether you should claim the state or federal exemptions, many factors can come into play. Sometimes the length of time you have lived in the state plays a role, and could cause you to claim your prior state’s exemptions. This might make a difference, depending on the value of things you owned prior to moving, so it is critical to have your attorney do a thorough review of your choices. If you have questions about what you should do, call us today.
For more information about bankruptcy exemptions, call us today or reach us online at www.law-ri.com. We offer appointments at multiple locations for your convenience and can schedule a time to visit with you today.