The general idea about filing for bankruptcy is that you will have to let go of all your assets. And surely this is not something that you would like. With the option of state and federal exemptions, you can actually save your assets and offer better protection to them while you are filing for bankruptcy. When you are filing for bankruptcy with the aim of wiping off your debts, that comes with a price. Moreover, there are some debts that cannot be wiped off either. Hence, it is necessary that you get a clear picture of your finances before you actually file. That is why you need to get in touch with an experienced Pittsburgh bankruptcy lawyer.Chapter 7 Bankruptcy Exemptions
If you are considering filing Chapter 7 bankruptcy, it is essential to know which debts can get eliminated as a result of the chapter 7 bankruptcy filing. Also, you need to get a clear idea about the exemptions. In Pennsylvania, you will get state or federal exemptions, that can help you save your assets.
Your state exemptions will allow you the following:
- Benefits of worker’s compensation
- Payments for disability insurance
- Benefits offered by your pension account
- Benefits you get from a retirement account
Your federal exemptions will allow you the following:
- Home equity up to $23,675
- Vehicle equity up to $3,775
- Job-related items up to $2,375
- Personal jewelry up to $1,600
- Household items worth up to $575 each for a total of $12,250
- Other property worth up to $1,250 up to a total of $11,850
In case, you are married and you and your spouse, both of thinking about filing for Chapter 7 bankruptcy, the exemptions will be double. You need to consider that any asset that you have got within only 6 months from the date of your bankruptcy filing, you won’t be able to protect with bankruptcy exemptions. In many cases, the debtor ends up retaining majority of their assets because of the exemptions.
The aim of bankruptcy filing is not about ruining the finances of the debtor. It is about offering a fresh start for them. Selling off all assets goes against that aim. Most of the debtors file for no-asset bankruptcy. while federal exemptions protect their assets, they only can offer personal belongings for liquidation which does not have much value in the resale market. This way many debtors end up keeping their assets.Debts That Cannot be Eliminated by Chapter 7 Bankruptcy
While chapter 7 bankruptcy can eliminate unsecured debts, there are secured debts that cannot be eliminated. These debts can include:
- Child and spousal support obligations
- Student loans
- Fines related to property ownership
- Penalties for court
To understand more in depth about the consequences and how the exemptions work, you need to talk to our experienced Pittsburgh bankruptcy lawyer. Come to Pittsburgh Bankruptcy Law Group and let us help you.