Chapter 7 Bankruptcy Exemptions

Posted by on Jun 1, 2013 in Financial, Legal Issues | 2 comments a person’s debt loads become too much for their financial situation to support, it may be necessary for that individual to seek bankruptcy protection in order to return to financial solvency. However, there are several different forms of bankruptcy which an individual may pursue, depending on their financial situation and the state in which they live.

One popular form of bankruptcy, Chapter 7, involves the liquidation of an individual’s assets in order to completely erase all but a few forms of debts. While this option may sound intimidating, many debtors ultimately find it to be the best route. This is particularly true because of the considerable exemptions that individuals pursuing Chapter 7 bankruptcy may enjoy.

The following are some of the various types of property exemptions that individuals undergoing Chapter 7 bankruptcy may be able to use to protect their most important assets, depending on the state in which they live:

  • Ÿ  Homestead exemptions, which allow debtors to exempt certain levels of equity in their homes from bankruptcy proceedings.
  • Ÿ  Vehicle exemptions, which allow debtors to exempt certain levels of equity in their vehicles.
  • Ÿ  Work equipment exemptions
  • Ÿ  Family heirloom exemptions

These and other property exemptions can help to make Chapter 7 bankruptcy a manageable choice for many debtors.

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Asset Protection in The State Of Texas

Posted by on May 16, 2013 in Financial | 2 comments

Law Office of Russell Van Beustring P.C.

Bankruptcy has been a centuries-old practice in the US, but it had always been the last resort taken by debtors, probably due to its complexity and the shame it brought. During the 1990s, though, due to the legal shelter and relief from serious monetary troubles it provided, bankruptcy became a widely accepted option for individuals, corporations and even local governments.

Bankruptcy is a federally certified procedure aimed at relieving debtors of their debts by legally allowing them to make repayment plans or partial repayment arrangements. Cases involving bankruptcy are filed in United States Bankruptcy Courts and fall under the jurisdiction of the federal law; the state may exercise authority, but only on those debtor-creditor issues which are neither addressed by, nor in conflict with, federal bankruptcy law, like property rights, debts arising from contracts, medical bills, rental leases and others.

No matter how big your debt is, by invoking bankruptcy, there are two major benefits that you will get to enjoy as soon as you file it: first is the automatic stay, which puts all debt-collection activities by your creditors to a freeze; the second, which actually depends on the specific bankruptcy chapter that you invoke, is either the time to create a plan for financial reorganization or to make arrangements for partial repayment.

Another benefit you will appreciate is protection to your most valued assets or properties. Bankruptcy laws, as well as state laws, allow you to choose and keep specific properties. Rather than lose everything, or many of what you worked so hard for, to your creditors, these laws give rise to what is called “property exemptions” or “asset protection.”

Each state has its own exemption laws that identify certain properties which you can keep. The federal bankruptcy law likewise offers a list of properties, with their dollar-value, that may be exempted (this list also includes the maximum dollar amount of your exemptions). Although you can choose either the state or the federal exemption list you cannot, however, match and/or mix exemptions stipulated in the state law and federal bankruptcy code.

In the state of Texas, specifically, you are offered a choice between state or federal exemptions, so that you either choose the exemptions listed in the U.S. bankruptcy code or the Texas bankruptcy exemptions. In Texas, some of the properties that can be exempt include homestead, motor vehicle, personal property (like books, sporting equipment, and firearms), pensions and retirement accounts, insurance exemptions, wages, social security benefits, civil service benefits and veterans benefits.

Changes in exemption amounts are made from time to time, so it is necessary that you check and review Texas laws to verify.

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