What Are Chapter 7 Bankruptcy Exemptions? 

You may not have to surrender the entirety of your belongings simply because you’re declaring bankruptcy. You may be able to apply for Chapter 7 bankruptcy under the Federal Bankruptcy Code to protect you from creditors from seizing particular assets. Exempt assets are property or assets that a debtor is entitled to keep.

You’ll have the opportunity to claim exemptions when you file your bankruptcy petition. Providing your creditors or the court doesn’t object to the exemptions, you will be able to keep these assets once your bankruptcy has been completed.

Differences Between Federal Exemptions & State Exemptions 

Despite the fact that Congress has a set of federal exemptions that have been established into the bankruptcy legislation, each U.S. state can choose to add other exemptions through state law. In order to take advantage of Florida-specific bankruptcy exemptions, you must have resided there for a minimum of two years prior to filing for bankruptcy.

Exemptions for Co-Owned Assets in Chapter 7

Bankruptcy exemptions only apply to the equity you have in a certain asset. If you have jointly owned property, you can only use your share of the equity to qualify for the exemption. In some cases, a bankruptcy trustee may decide to liquidate an asset and use your portion of the proceeds to pay down your debt.  

However, if your property only has a little more equity than the exemption threshold, most trustees will not sell them. Trustees will normally only liquidate your property if you have sufficient nonexempt equity to satisfy your creditors in full.

Exemption Examples 

In the event of a bankruptcy, you are allowed exemptions for your home, your automobile, and some personal assets. In most cases, you should be able to keep daily necessities. Additionally, the following assets are completely exempt:

• Spousal support or alimony payments 
• Child support payments 
• Social security payments 
• Disability payments 
• Veterans Benefits 
• Funds taken out of an IRA or 401(k) 
• Personal injury settlements 

How a Dallas, TX Bankruptcy Attorney Can Help You in Chapter 7

If you’re struggling to meet all of your financial obligations, a Dallas bankruptcy lawyer can assist you. By filing a Chapter 7 bankruptcy, you may be able to keep your assets and eliminate most or all of your debts. Contact Sims Bankruptcy, PLLC today for your consultation by calling 469-751-7467 (DFW) or 254-304-7161. Our team of experienced legal advocates are available now to help you and your family.