If you have too much debts, the hardest part could be filing for bankruptcy. Many people prefer Chapter 7 Bankruptcy. Chapter 7 is a ‘liquidation’ of all the non-exempt assets which should ultimately be an effective way for you to pay off all your existing debts. The process is fully supervised, and the court will appoint a a person known as a trustee to get sales from all the non-exempt assets of the defaulter and appropriate the sales money to various creditors. Bankruptcy chapter 7 exemptions are assets that cannot be sold when the bankruptcy is filed. Chapter 7 bankruptcy is usually favored by debtors but not the creditors and with the help of exemptions, you could effectively reduce your personal damage and will be able to keep some of their belongings.
In this exemption the debtor will review the state exemption list given to the debtor and learn which property to keep. This list is found in the Federal Bankruptcy Code. All the property of the debtor will be divided as exempt or non-exempt when a property exemption report is filed by the trustee. The exemptions are not across the board and the law can be very different in some states, but the basic laws should remain unchanged.
Debts that are classified as secured debts will be paid first. As for debts that are unsecured, there is a chance that the creditors may not get the money in full. The trustee makes sure that the right creditors get the deserved money in the right way. To get bankruptcy chapter 7 exemptions, the defaulter must file the case in the state where he/she resides for a period of 730 days before he/she can file for this type of bankruptcy. Or the defaulter may also file the case in a state where he/she has previously lived for more than 180 days, up to 2 years.
There are also the Federal exemptions which will cover retirement benefits, death disability benefits, survivor’s benefits and miscellaneous. Although, keep in mind that these may not be available in all states.
Yes, bankruptcy is not a good alternative and worst still, your credit score will drop a lot because of it. Not only you will lose all your personal belongings and you need start all over again in your life. It must only be considered when there is no other option.
If, unfortunately, you have no other options, then get to find out more about bankruptcy chapter 7 exemptions as it can help you reduce your personal loss of assets and maximize the benefits of this law to pay off your debts fast.
Bankruptcy can be scary but you can minimize the loss. Visit my website as I talk about Chapter 7 Bankruptcy and chapter 7 exemptions