Many people tend to treat bankruptcy as the end of the road. In the real sense, bankruptcy offers you a fresh start in life if you are overwhelmed by debt. This is because your debt obligations can be discharged or wiped out because you do not have to pay them if you file under bankruptcy exceptions. Sometimes, arrangements may be made so that you can pay your debt over time according to a budget or schedule. However, some of your properties may be sold to repay your debt obligations. But the good news is that you don’t lose everything, thanks to the bankruptcy code which recognizes that you have basic needs that gives you property exemptions. Such properties cannot be sold whatsoever to pay your debts.
How to claim exemptions
You should include a schedule or list of exempt properties when you are filing your bankruptcy petition. In your schedule, you should include the following:
• Quote the specific law that allows each exemption
• Describe each item you are seeking exemption
• The current market value of the item you are claiming for exemption.
The court, creditors and trustees will review the schedule to determine what your list is qualified for exemptions. Your trustee or creditors have 30 days to object your list during the creditors meeting. The creditors meeting, also called 341 meeting should take place immediately after you have filed the case. It is the the person who disputes the list that has the burden of proofing that the property should not be exempt. Should no one dispute your list, then none of the property in the list can be sold to pay off debt.
What and how much can be exempted
The federal bankruptcy code sets the type and amount of bankruptcy exemptions in a particular state. Exemptions may be set entirely on the state law, meaning that your exemptions depend so much on where you live. Although there have been some efforts by the federal law to make things uniform, states were permitted to opt out of the federal exemption laws and create their own laws for exemptions. In that regard, one may have a choice between a federal law and state law. However, many states limit you to in terms of choosing the federal exemption laws. You need to discuss this with your Tempe az dui lawyer to determine which exemptions are permitted and what options are available to you.
What about the House and the Car?
You can only use residential properties to apply for exemptions. Most state laws and federal exemption cap the market value of the property at $21, 165. However, there are some states like Florida where there is no limit of the value you can apply for exemptions. In some states like New York, the limit can vary between $50,000 and $150,000, depending on the particular location you live.
Due to the fact that there are some cleaver homeowners who could move to a particular state that allows generous exemptions like New York, a law was introduced to limit the time one is allowed to file the bankruptcy exemption.