Using The Law To Make Your Life Better

Understanding exemptions in bankruptcy is crucial

David Sexton

Chapter 7 bankruptcy has helped millions of Americans address overwhelming debt burdens, including many people in Tennessee. Regardless of how a person's financial situation spiraled out of control, filing for bankruptcy is an option that can help Tennessee residents get themselves on a better financial path in life. However, understanding the details of a bankruptcy filing is crucial, including how exemptions come into play in the bankruptcy process.

Once people determine that they are eligible for Chapter 7 bankruptcy, determining which exemptions to claim in terms of personal property can be a difficult task. There are multiple types of assets which may be exempt from the bankruptcy process, meaning that those assets will not be liquidated as part of the Chapter 7 bankruptcy filing. For example, these are the types of assets that might be considered exempt: workers' compensation benefits; vehicles; household appliances and furniture, among other household goods; jewelry; items used by the filer in their work; clothing; and even funds that are placed in retirement plans. Quite simply, there are many different assets for Tennessee residents to consider when they are determining which assets will be exempt.

The goal of the Chapter 7 bankruptcy process is to get out of debt. To do so, non-exempt assets are sold off by the bankruptcy trustee to pay off debt obligations. Once all of the funds from liquidated assets are expended, any remaining debt will be discharged.

Of course, every person's financial situation is different, meaning that any given bankruptcy case can be quite different from another. At our law firm, we do our best to make sure that our clients understand their legal rights and options. For more information, please visit our law firm's website.

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