Individuals who file for bankruptcy are seeking protection against obligations incurred from their creditors. The United States Constitution empowers the federal government to establish Bankruptcy Courts for the handling of bankruptcy proceedings throughout the country. Upon filing for bankruptcy protection, one is expected to hand over a sizeable chunk of his or her property to the bankruptcy estate for the settlement of the debtor’s creditors. On the contrary, bankruptcy debtors do not necessarily need to turn over all their property to the bankruptcy estate. In a liquidation case under Chapter 7, the debtor is required to turn over a certain portion of the property to the trustee. Whether individuals or businesses, debtors are often justifiably worried about the property they will be permitted to keep and those to surrender.
The law on bankruptcy allows the indebted individuals to keep a specified portion of the property at the discretion of a bankruptcy proceeding. The protected property is referred to as exempt property and it is exempted from the bankruptcy estate. Ordinarily, indebted persons can absolve a specific portion of their property in the event of bankruptcy. When it is done right, the process can conceivably spare a large portion of the property of the individual experiencing bankruptcy. The exempt property may be considered as the necessity of life and for the most part includes kind of things that are necessary for working and living. The law on bankruptcy is meant to get borrowers from crushing obligations and returning them on their feet. It is counterproductive to take everything from them, a fact that is recognized by the bankruptcy law.
Generally, the non-exempt property covers things are not considered as the necessities for working and living. The general practice experience and court decisions have established what property qualifies as exempt or non-exempt. Non-exempt property includes items such as luxurious musical instruments, valuable collections, family heirlooms, second car, bank accounts, cash, bonds, stock, and vacation homes. Exempt properties include motor vehicle, household goods and appliances, jewelry, tools of trade, unearned wages, public benefits and personal damages. Click this site for more information.