What Assets Are Exempt In Chapter 7 Bankruptcy?
When clients or potential clients come to Evan M. Altman, Attorney at Law, to discuss Chapter 7 bankruptcy, what’s first and foremost on their minds is knowing what property they will have to give up if they decide to file bankruptcy. The good news is that the bankruptcy court does allow for the retention of certain asset classifications. Many individuals, however, are disappointed to learn which items they’re unable to protect in a Chapter 7 bankruptcy. Still, knowing what to expect is crucial in making a decision about bankruptcy, and debtors should always discuss their options with a professional Georgia bankruptcy attorney before moving forward.
Understanding Exempt Assets
Exempt assets consist of the property that the debtor is not required to liquidate to reimburse his or her creditors. These include:
- Equity in a home up to a certain limit
- An automobile up to a certain market value
- Personal jewelry up to a certain value
- Most clothing
- Earnings that have not been received
- Furnishing and household items up to a certain amount (e.g. chairs, small appliances, et cetera)
- Tools of the trade (items needed to earn a living)
- Awards from personal injury lawsuits up to a certain amount
- Welfare, Social Security or unemployment benefit payments
Nonexempt Assets In Bankruptcy
Most of the assets that aren’t included in the above list of exempt property would be considered nonexempt by a federal bankruptcy court. Some examples of items that are on the exempt list but would still be liquidated would include:
- Equity in a home that exceeds the prescribed limit
- An expensive car (exceeding a particular value)
- Valuable jewelry (claiming jewelry or other items as family heirlooms will not exempt them)
- Luxury clothing that wouldn’t be considered essential for living (e.g. furs, some designer suits or dresses)
- Tools or equipment used for a hobby, but not to earn a living
- Gambling winnings
In some instances, even though an item is not exempt, it might be deemed to be of too little value to be liquidated. In this case, the debtor would retain the property. A skilled bankruptcy attorney can assist in selectively placing exemptions as provided under state and federal law to maximize the amount of property that can be kept.
A Bankruptcy Lawyer Can Help
Regardless of whether you are contemplating debt relief under Chapter 7 or the restructuring of debt under Chapter 13, you should seek the advice of a reputable bankruptcy lawyer like Evan M. Altman. In Atlanta or northern Georgia, contact The Law Office of Evan M. Altman by calling 770-285-7134 or sending an online message.
We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.