It doesn’t matter if you are going through Chapter 7 or Chapter 13 bankruptcy in Philadelphia, exemptions are sure to play a big role.
With Chapter 7, exemptions go a long way in determining how much property you are allowed to keep.
With Chapter 13, exemptions ensure that your repayment plan payments are kept as low as possible.
Before we go any further, it is important to realize that bankruptcy exemptions differ from one state to the next. You must consult with a local attorney to better understand how your situation will be treated.
What are Bankruptcy Exemptions?
For some, the thought of filing bankruptcy means losing everything they own. But guess what? This is not how the process works. With bankruptcy exemptions, you are able to keep some or all of your assets.
Some exemptions are in place to protect specific assets, such as a motor vehicle. In some cases, an exemption can protect the entire value of an asset. In other cases, the exemption only protects a portion of the asset.
Tip: if you are able to exempt an asset during bankruptcy, you don’t have to concern yourself with it being sold to pay back creditors.
Exemptions during Chapter 7 bankruptcy are not the same as when filing Chapter 13.
With this type of bankruptcy, your trustee is looking to sell your assets as a means of obtaining money to repay creditors. However, if an asset is exempt they are not legally allowed to do so. This alone is how bankruptcy exemptions help protect your assets.
With Chapter13 bankruptcy, your trustee will not attempt to sell assets to repay creditors. Instead, you are able to keep your property. That being said, the amount you are required to pay creditors will be based largely on the assets you can exempt.
The goal of exemptions in Chapter 13 bankruptcy is to keep your repayment plan payments as low as possible.
Are you Ready to Get Started?
If you are ready to move forward with Chapter 7 or Chapter 13 bankruptcy in Philadelphia, you need to speak with an experienced attorney about bankruptcy exemptions in Philadelphia and how this will impact your situation.
We can help you better understand bankruptcy exemptions in Philadelphia, allowing you to make an informed decision on which steps to take next. Contact us to learn more, to ask questions, and for assistance filing for bankruptcy.