There is no clear-cut solution to the question for many people. Is it necessary for me to declare bankruptcy? Most can be determined by the own circumstances. You’re going to want to see what’s on the line. What do you stand to lose? What do you possibly keep? Examining the personal bankruptcy exemptions for the state where you live is a good place to start. read this article
What are the different types of personal bankruptcy exemptions?
Personal bankruptcy exemptions are divided into two categories:
1. You can’t stop paying your debts
2. Property that you are permitted to hold
Exemptions from debt in personal bankruptcy
If you think declaring bankruptcy would free you from having to pay back every penny you owe, you’re mistaken.
Taxes, child support fees, alimony, and student loans are all debts that you will continue to pay even though you declare bankruptcy. There are, however, exceptions to this law, so it’s important that you understand all of your choices.
Exemptions for assets in personal bankruptcy
Your home, vehicle, furniture and other household goods, clothes, pension accounts, insurance, equipment, and jewellery are all considered exempt assets.
The specifics differ from state to state. There is frequently a maximum value for a given commodity. This is your homestead exemption for real estate used as your primary residence. This can cost up to $175,000 in California. It costs $500,000 in Massachusetts. However, the annual homestead exemption in Wyoming is just $10,000.
The good news is that filing for bankruptcy does not mean you lose anything you own, whether you live.
Personal bankruptcy exemptions are available on both a federal and state level.
You may choose to use federal bankruptcy exemptions instead of state exemptions in sixteen states. This might or may not be advantageous to you, so make sure you compare asset values before making a decision. You cannot distinguish between federal and state exemptions; you must use either all state or all federal exemptions.
Your exemptions are doubled if you file a joint bankruptcy.
If you declare bankruptcy together with your partner, you can double your allowance at once thanks to federal and most state exemptions. Although this might seem like a good idea, it’s important to weigh the pros and cons of filing jointly versus filing alone.
It’s not always a good idea to file for bankruptcy right away.
As eager as you are to figure out your finances, it can be in your best interests to wait. While exemption values are set, asset values can change dramatically in a matter of months. Your car may be worth $7,000 today, but your exemption limit is only $6,500. If you wait long enough, your car’s value will drop to the limit.
Without the help of an attorney, you will file for bankruptcy.
As previously mentioned, you must obtain correct, up-to-date details, preferably from an attorney, before filing for personal bankruptcy. Legal advice will sometimes save you much more money than it costs.