Bankruptcy Exemptions in California
Bankruptcy is a very serious thing but it can help you to reset your life and get back to living a life that does not require you to try to pay back crippling debt. Filing for bankruptcy is a very serious thing and making sure you take the time to learn all that you can about bankruptcy.
What are Bankruptcy Exemptions?
A bankruptcy exemption is a law that was created to help protect your property in the course of a bankruptcy. This means things like your home, your car, and other property that cannot and will not be sold to help pay back your creditors.
When you file for bankruptcy you can reaffirm certain loans and can make certain that you are able to keep paying for those loans and that they cannot be taken from you. Your lawyer can better explain what property is exempt from bankruptcy and what property cannot be taken.
How Do Exemptions Work?
With chapter 7 bankruptcy you are going to be able to talk to your lawyer and find out just what you can and cannot sell to pay back creditors.
Common exemptions are your home, your car, and personal property like furniture that you have already paid for and things that have been passed down through your family. You may also be able to keep your computer and your television.
With chapter 13 bankruptcy you are going to be able to reduce payments to your unsecured creditors like credit card companies.
You can again secure your home, your car, and some of your personal property to keep your creditors from being able to take that property and force its sale to help pay back your debt.
California State Bankruptcy Exemption Law
In the state of California you can exempt things like the property that you reside in, even if this is a mobile home, your boat, an apartment, condo or other areas if you are not disabled up to the value of $75,000.
You can also exempt artwork, your car up to a certain value, and your personal property up to a certain amount as well.
It is important to take the time to talk with a lawyer about what you can exempt and what you might be able to classify other items under to help protect them from being sold by creditors to pay back debt.
What Do Property Bankruptcy Exemptions Protect?
Exemptions protect a range of different properties. First and foremost it protects your home up to a certain amount. Of course, if you are filing bankruptcy and you have a million dollar home that is paid off and that has no significance, you may be required to sell to help pay back debt, but most people are going to be able to keep their home.
Exemptions are also going to protect your car up to a certain amount as well. Again, if you have a classic car collection you may not be able to keep all of them but you are going to be able to keep your car if it falls within a value range that is set by your state. You may be able to keep your personal property as well like your clothes, your television and your computer.
Of course, all of the property that you are able to keep is based on its value. You are not going to be able to keep millions of dollars in personal property if you are filing for bankruptcy and are going to have to sell off some items to help pay the debt.
It is always a good idea to talk with a bankruptcy lawyer and to try to find out just what can be saved and what you might need to sell off to help pay your debt. It is always best to talk with a lawyer so that you can better understand the overall laws that apply to where you live and to what your state’s personal property exemptions are and what you can and cannot keep while going through a bankruptcy.
What is the Homestead Exemption in Bankruptcy?
When it comes to filing for bankruptcy you may come up against something called the homestead exemption. This does a few things, for starters, it helps you to make sure that you are not going to lose everything in the case of a bankruptcy. The homestead exemption mainly helps to protect your equity in your home when filing for bankruptcy.
In the state of Kentucky for example you can protect up to $5,000 in equity in your home when filing. This helps to keep the home from being mortgaged over and over to help pay for the debt that you owe. Essentially this helps to keep your home value at what it was before the bankruptcy so that you do not lose all of the equity that you have built up in your home over the years.
It is always best to talk with a bankruptcy lawyer before you ever even start the process to learn what you need to fill out, what you need to do, and what property you can keep during a bankruptcy. Bankruptcy is a scary thing but with the help of a great lawyer you can learn all about the process and can learn just what needs to be done to protect your property and make it through bankruptcy without issue or without trouble.
At Nathan A Berneman, APC we handle both Chapter 13 and chapter 7 bankruptcy filing along with debt relief. To learn more about the process, and how it can help you, contact us at 805-492-7045/888-200-4443 to schedule a free consultation.