When debts spiral out of control, many Florida residents consider filing for bankruptcy. Bankruptcy is one way they can seek protection from those debts but they must give up a portion of their property during bankruptcy proceedings. A bankruptcy trustee then sells off the property to collect money to pay off the filer’s creditors. However, not all assets and property have to be turned over, so filers can validly wonder what they get to keep and what they have to give up.
Exempt vs. non-exempt property
Property that filers can keep during bankruptcy is called exempt. Property that cannot be exempted is called non-exempt property. It may be possible for filers to save a large portion of their property during the Chapter 7 bankruptcy procedure, if done right.
What is meant by exempt property?
Exempt property is generally known as the necessities of modern life, such as items that are necessary for living and working. Since bankruptcy revolves around getting people back on their feet after facing financial trouble, depriving a filer from his or her house can be counterproductive. Therefore, it is possible to keep cars and jewelry, up to a certain value, reasonably necessary clothing and household goods, public benefits, portion of equity in the house and pensions. Second cars and homes, expensive musical instruments and cash will probably be non-exempt property.
When filing for bankruptcy, it is important to know what one can keep and what one is going to lose, in order to plan for the future. It might be helpful to consult an experienced attorney to understand one’s options and the process for getting bank on one’s feet.