When filing for personal bankruptcy protection, such as Chapter 7 bankruptcy, there are several layers of protection that the filing party should be aware of. One type of protection includes bankruptcy property exemptions. Some property is exempt from the Chapter 7 liquidation bankruptcy process and filing parties should know how that works.
Homestead exemption
Those living in incorporated areas can protect a home that they own and up to a half an acre of land from any forced sale. Mortgage lenders and creditors whose funds have gone to the improvement of the property may be able to pursue foreclosure of a home or place a lien on the home. In those circumstances, other bankruptcy options may be able to help. It is important to note that a homestead exemption must be filed with the court.
Personal property and vehicle exemptions
For filing parties seeking bankruptcy protection who do not claim the homestead exemption, they may be able to claim up to $4,000 in personal property exemptions per person. In addition, they may be able to claim up to $1,000 exemption in the value of their vehicle. These two types of exemptions may be combined for filing parties who do not pursue the homestead exemption.
Other exemption options may also be available, including wage exemptions for head of household, so filing parties should be familiar with what all their different options are so they can decide on the option that is best for them. Different bankruptcy options can help protect struggling consumers and also help filing parties enjoy debt relief which are important potential benefits to be familiar with when considering personal bankruptcy protection.
