A common question from people who are filing for bankruptcy has to do with what property they will be allowed to keep. Property that isn’t subjected to becoming part of the bankruptcy estate is considered exempt property. This means that people can hold on to some items, while other items might be part of the bankruptcy proceedings.
Does the bankruptcy chapter affect exempt property?
In some cases, the bankruptcy chapter will affect what property is exempt. For example, more property is exempt in a Chapter 13 bankruptcy filing than in a Chapter 7 bankruptcy filing. This is because a person filing Chapter 13 enters into a plan to repay at least part of the debts, while a person filing Chapter 7 is liquidating assets to cover a portion of the debts.
Is real estate exempt property?
Your homestead might fall under the homestead exemption laws. There are some guidelines as to the size of the real estate that is exempt. For example, property that isn’t within a municipality is limited to 160 contiguous acres. Second homes, vacation homes and other types of real estate aren’t protected by bankruptcy exemptions.
Are vehicles exempt property?
One motor vehicle up to $1,000 is exempted as personal property for bankruptcy filers. This is covered in § 222.25. There might be exceptions to this exemption, so it is important for filers to check the laws pertaining to their case prior to filing.
What other property is exempt from bankruptcy filing?
Some pensions, certain jewelry, household appliances, public aid, personal injury awards, some household furnishings, certain life insurance policies and some clothing are all exempted from bankruptcy proceedings in most cases. Items like stocks, bank accounts, family heirlooms, expensive items like musical instruments and collectors’ items are some examples of what might be included in the bankruptcy that some people might not even think about when they file for bankruptcy.
Source: FindLaw, “Exempt vs. Non-exempt Property Under Chapter 7” Aug. 04, 2014