When debts are overwhelming, bankruptcy filing may be the only option for you. Many people prefer Chapter 7 Bankruptcy. This chapter involved selling all your non-exempted assets that can ultimately be an effective way for you to pay off all your existing debts. As this is a supervised procedure, the authority will appoint a personnel who has the authority to liquidates the non-exempt assets owned by the defaulter and use the sales proceeds to pay off the various creditors. Chapter 7 Exemptions means that there are assets that the creditors cannot touch when chapter 7 bankruptcy is filed. Chapter 7 bankruptcy is usually favored by debtors but not the creditors and with with the exemptions in place, you can bring their personal damage to the minimum and keep some personal belongings.
The debtor selects property that he/she is eligible to keep from a list containing state exemptions or exemptions provided in the Federal Bankruptcy Code. The property shall be separated as exempt or non-exempt when a property exemption report is filed by the trustee. The exemptions are not across the board and the law can be very different in some states, but the basic laws should remain unchanged.
Debts that are classified as secured debts will be paid first. As for debts that are unsecured, there is a chance that the creditors of unsecured debts receive partial or no payment. The trustee will pay the right creditors in the right amount. One thing to note, if you want to file bankruptcy chapter 7 exemptions, the debtor must file the case in the state where he/she lived for at least 730 days before he/she can file for this type of bankruptcy. Alternatively, the debtor may also file the case in a state where he/she has previously lived for more than 180 days, up to 2 years.
There are also the Federal exemptions which will cover retirement benefits, death disability benefits, survivor’s benefits and miscellaneous. Although, keep in mind that these may not be available in all states.
Bankruptcy is probably the worst scenario, your credit score will fall because there is a bankruptcy filing. Not only you will lose all your personal belongings and you need to start your business all over again from nothing. Always consider other options before you look at bankruptcy.
Of course, if you are left with no alternatives, then try to learn more about bankruptcy Chapter 7 Exemptions that can help reduce your loss and maximize the benefits of this law to pay off your debts fast.