Having the weight of tremendous debt on your shoulders can often be an extremely stressful experience. Taking positive steps toward reducing or eliminating the debt is never a bad decision. No matter what choice is made, however, there can be elements of the process that can also hold a significant amount of uncertainty and fear if not properly explained.
Chapter 7 bankruptcy is one such path a debtor can go down to eliminate their debt. While the elimination of debt is undoubtedly a positive, in this type of bankruptcy, some assets may be liquidated in order to pay back the money owed. Not all assets, however, are able to be liquidated by the creditor or creditors in the situation. Assets that cannot be liquidated are known as “exempt.”
Specifics on such property may vary, but they can basically be considered assets that are essential to modern life. Anything that is necessary for the debtor to keep working (in order to pay off further debt) can fall under this category. Items such as vehicles, necessary clothing, reasonable household goods and furniture, and more can be considered exempt.
Even with these types of safety nets in place so that debtors can live reasonably and continue down the road to financial stability, the process of bankruptcy can be complicated and stressful. Seeking assistance from an experienced attorney can help smooth out the process and clear up many of the questions and fears associated with bankruptcy.
Source: findlaw.com, “Exempt vs. Non-exempt Property Under Chapter 7,” accessed Sept. 10, 2015