What do you do if you’re in debt and don’t feel right about filing for bankruptcy? The threat of bankruptcy filling is no joke. It’s a life-changing event that can destroy everything you hold dear. Your job, your income, and even your relationships can be jeopardized.
These days are intense, highly stressful, and highly frustrating. If you or someone you know is considering bankruptcy and searching for an excellent bankruptcy attorney to handle the process, look no further.
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Exemptions from bankruptcy are laws that protect your property when you file for bankruptcy. Both the Bankruptcy Code and state law have laws about exemptions. State laws often have exemptions that protect your property from creditors even if you don’t file for bankruptcy.
You can’t sell the exempt property to pay off your unsecured creditors. To keep your property, you must use the proper bankruptcy exemption when you file for bankruptcy. If you don’t claim any exemptions or the wrong ones, the Chapter 7 bankruptcy trustee can take your property.
Exemptions play a significant role in whether you are filing for Bankruptcy Chapter 7 or Chapter 13 bankruptcy.
Chapter 7 bankruptcy is a liquidation bankruptcy in which your nonexempt assets are sold to pay off your creditors. Exemptions allow you to secure your assets in Chapter 7 bankruptcy since the trustee cannot sell the exempt property. For instance, if your state’s motor vehicle exemption is $6,000 and you only own one automobile for $5,000, you may keep it.
A Chapter 13 bankruptcy lets you retain all of your property and restructure your debts (which can mean paying less on some of them). But the amount you must pay certain creditors still depends on how much property you can exempt. Nonpriority unsecured creditors (including credit card issuers) must get an amount equal to the cost of your nonexempt assets. In Chapter 13 bankruptcy, exemptions reduce the amount owed to creditors, lowering plan payments.
Individuals may only claim bankruptcy exemptions because exemption laws exist to protect them. When a business files for Chapter 7 bankruptcy, it closes, and its property is either handed back to secured creditors or sold to pay off unsecured creditors. Individuals and married couples don’t go out of business like that, so the exemption system lets them protect specific property.
The liquidation of certain nonexempt assets is probable in a Chapter 7 bankruptcy. However, both Chapter 13 and Chapter 11 are considered reorganization initiatives with repayment plans. With these two bankruptcies, it may be possible to prevent liquidation.
Many types of property are protected by both federal and state laws, such as
Each state has its own set of exemptions for bankruptcy. There is also an exemption set in federal law. Some states use their exemptions, while others let you choose between their exemptions and the federal ones (you cannot mix and match the two).
Whether you can use a state’s exemption laws depends on where you lived in the last two years (called the “domicile requirements.”)
When Congress implemented the bankruptcy rules, it established federal bankruptcy exemptions and gave states the option of using federal exemptions or establishing their own. Fewer than half of the states let filers secure their real and personal property using federal or state exemptions.
Maryland requires filers to have resided in the state for at least two years to claim state exemptions. Therefore, you must seek exemptions under Maryland bankruptcy law to safeguard your property. You may use the federal nonbankruptcy exemptions but not the federal bankruptcy exemptions included in the Bankruptcy Code. The nonbankruptcy exemptions protect retirement savings usually associated with a government position.
A bankruptcy exemption may not cover all assets. Non-exempt property is a property that is not protected by exemption laws. Using the exemption system, most Chapter 7 bankruptcy filers can preserve all of their property.
The bankruptcy trustee liquidates or sells to the highest bidder all non-exempt property. The profits from the sale are then used to pay unsecured creditors who have a claim against your bankruptcy estate.
In rare instances, a trustee may let you “buy” the non-exempt property equity. In such a circumstance, the amount you must pay to retain your property is determined by the asset’s worthless exemption amount.
Therefore, if the value of your property is $9,000 and the exemption is $7,000, you may purchase the non-exempt equity for $2,000. To save the expense of selling the property, the trustee may enable you to do this. Upon the sale of the property by the trustee, you will get $7,000. The leftover money is used for your unsecured obligations, such as credit card and medical payments.
The filer may retain all non-exempt property as long as the unsecured creditors get the value of the non-exempt assets under the Chapter 13 repayment plan.
Certainly not! The bankruptcy process is complicated, and there are many possible pitfalls along the way. Even though it might seem complicated to find an affordable bankruptcy lawyer in Maryland, the fact that you might be able to get rid of a lot of debt and stress often makes it well worth it.
The Law Offices of Kurkland Law Group is a bankruptcy law firm serving residents of the Rockville, Maryland area for over 20 years. We focus on one thing and do it well: helping people who have gotten into financial trouble get out of debt and regain their financial independence. Our team comprises highly trained professionals who know how to assist you with Chapter 7, 11, or 13 bankruptcy, regardless of your particular circumstances.
We know you’re thinking about filing for bankruptcy, and we understand the questions you have: How much will it cost me? To whom will I be making payments? Will my assets be protected? Can I still keep my house? These are all legitimate concerns with straightforward answers provided by our firm.
The Law Offices of Kurkland Law Group specializes in bankruptcy law, and we have a proven track record of helping people like you attain debt relief. We can answer any questions you may have, regarding filing fees, payments, or exemptions. Our firm is committed to helping people just like you get the relief they need to move forward with their lives.
There is no substitute for quality legal advice when it comes to bankruptcy and bankruptcy exemptions. The right advice could save you thousands or even millions of dollars and preserve your assets now and in the future. If you face a debt crisis, you need to take action immediately – Kurkland Law Group now, and let us protect your future!
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