When you file for bankruptcy as an individual, the law allows you to keep a certain amount of your belongings. In theory, this is to give you some assets to start over with while also providing you with enough to survive. Federal bankruptcy code refers to the property you can keep as “exempt.” Before you file, it can be a good idea to become familiar with the types of exemptions available to you. Before calling a bankruptcy attorney Battle Creek MI, see if any of these might apply.
With this exemption, you can protect up to $25,150 of equity in your primary residence. Note this does not apply to vacation homes because the law considers those secondary residences.
- Personal Property
Look around your house. Items like furniture, decorations, clothing, jewelry and kitchenware fall under this category. You can keep up to $13,400 worth of these sorts of goods.
If you receive payments from sources like insurance or alimony to support yourself, you may be able to keep up to the amount needed to continue support.
- Injury Award
Similarly, if you have received income from a personal injury lawsuit, you can keep up to $25,150. This exemption also applies to wrongful death and crime victim situations.
- Retirement Account
If your retirement account is tax-exempt, there is no limit on the amount the law exempts. On the other hand, IRAs and Roth IRAs have a limit of $1,362,800.
Lastly, you can use this category for most kinds of property that do not fit under any of the other kinds of exemptions here. From cars to cash to fine art, the Wildcard can exempt up to $13,900, depending on how much of the Homestead Exemption you use.
Contrary to what many think, bankruptcy is not the end of your financial future. If anything, it is the beginning. Even better, there are many instances when you can keep your assets. Check state laws to see how they compare with the federal exemptions listed here.