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A Brief Look at Bankruptcy Exemptions

If you file a Chapter 7 bankruptcy petition, exemptions determine what property you get to keep and what property you need to give to the trustee. In a Chapter 13 petition, having bankruptcy exemptions results in lower monthly payment plans. Bankruptcy petitions usually protect certain types of assets, such as motor vehicles and wedding rings. 

Deep in debt

In a Chapter 7 bankruptcy, the trustee sells the debtor’s assets in order to pay back a portion of the owed debt. However, the bankruptcy trustee is unable to sell property or assets that are considered exempt. This means that bankruptcy exemptions allow debtors to protect certain assets during the Chapter 7 bankruptcy process. While Chapter 7 bankruptcy results in the sale of non-exempt assets, Chapter 13 bankruptcy allows debtors to keep all property and reorganize their debts. However, the amount owed to creditors depends on what property qualifies as a bankruptcy exemption. As a result, bankruptcy exemptions in Chapter 13 help reduce the amount owed to creditors in the payment plan. 

Call (847) 505-0380 to schedule a free bankruptcy evaluation with Cutler & Associates, Ltd. Our bankruptcy attorneys have helped thousands in the Chicagoland area, including Aurora and Schaumburg. 

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