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With the ready availability of credit at historically low rates, more and more people are assuming ever increasing amounts of debt. Unfortunately, carrying large debt loads can leave you vulnerable if there is a change in your current financial situation. A sudden loss of employment, an injury or illness can make it difficult to pay your creditors. While the stresses of juggling credit card bills, car and house payments on top of daily expenses can be alleviated with personal bankruptcy protection, knowing your rights and what is exempt from the proceedings is critical.

Within the framework of debt relief legislation, there is an option to make exempt real property such as the family home in which you reside to retain home equity. You might also opt to exclude your car required for work purposes from the bankruptcy. The laws that govern debt protection are not meant to leave you without the means to carry on a productive life but rather to compensate creditors within reasonable means and thus permit homestead exemptions, jewelry, and personal property exclusion.

While non-tangible assets such as life insurance and retirement savings plans carry an inherent value, they can be exempt from your filing as they Federal law protects these assets. You won’t lose your nest egg when getting out of debt through bankruptcy; however, there are times when people will cash in their 401K to access cash to deal with the burden of debt which leaves that money available to creditors during the proceedings. Liquidating protected assets just preceding or during the filing for protection is never an advisable solution.

Whatever your financial picture, if you feel overburdened by debt and simply aren’t able to make minimum service payments or are concerned about property exemptions then speaking with a professional might be your best course of action. A trained bankruptcy attorney can guide you through the process and make you aware of what your options are and help you create an exemption plan that allows you to plan for the future.