What are exemptions?
11 U.S.C. § 522(b) allows an individual debtor to exempt real, personal, or intangible property from the property of the estate. Exempt assets are protected by state law from distribution to your creditors. Typically, exempt assets include vehicles up to a certain dollar amount, the equity in your home up to a certain amount, and tools of the trade. Exemptions are claimed on Schedule C. As with all schedules, it is important to fully complete and provide all the information requested. If no one objects to the exemptions you have listed within the time frame specified by the bankruptcy court, these assets will not be a part of your bankruptcy estate and will not be used to pay creditors through your bankruptcy case. Deciding which assets are exempt and how and if you can protect these assets from your creditors can be one of the more important and difficult aspects of your bankruptcy case. It is extremely important to consult an attorney if you have any questions regarding the issue of
The Bankruptcy Code allows an individual debtor to hold back from the bankruptcy process certain property. Such property is called an exempt asset. Exempt assets are protected by state law from distribution to creditors. Examples of exempt assets include vehicles up to a certain value, equity in a home up to a certain value, and tools of your trade. Exemptions must be claimed or lost and they are claimed on Schedule C. If no one objects to the claimed exemptions within a specified time, the assets may not be part of your bankruptcy estate. The Bankruptcy Code allows states to choose to use their own exemptions rather than the Federal exemptions listed in 11 U.S.C. §522. A full list of state and Federal exemptions is included in the service on this site.
Certain assets owned by the debtor have what is known as an exempt status. This means the debtor can protect them from the reach of creditors and the Chapter 7 trustee. The exemption will not apply to a mortgage or lien voluntarily placed on the asset by the debtor. The availability of exemptions and how to properly and effectively claim them should be discussed with your attorney.
