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Property exemptions in Chapter 7 bankruptcy

A lot of Ohio residents are surprised to find that Chapter 7 bankruptcy proceedings will not require them to sell off all of their possessions. Bankruptcy is not intended to leave individuals penniless and possessionless, as it is a process for helping people get back on sound financial feet again. Numerous possessions will therefore be exempt from the bankruptcy process. This article will discuss some of the primary exemptions that filers can benefit from.

Homestead exemptions are one common exemption that relates to Chapter 7 proceedings and they allow for individuals and families to keep their homes. Still, Chapter 7 proceedings have limits associated with their homestead exemptions. Federally, the homestead exemption is limited to approximately 20,000. Meanwhile, states offer different levels of homestead exemption with many offering significantly higher levels of protection.

Automobile exemptions are also commonly taken advantage of in Chapter 7 proceedings. A car is essential to getting to and from work every day and carrying out one's daily life needs. The bankruptcy process honors this need and allows individuals to keep their cars up to a certain level of exemption. Federally, this cap was $3,225 as of 2010.

Personal property (real property) exemptions relate to personal property. Real property exemptions could include, home furniture, jewelry, appliances, and more. There is also a "wide card" category for exemptions that do not fit into a particular classification. If arguments can be made to show the necessity of the property, then filers might not need to liquidate it.

A skilled Cincinnati bankruptcy attorney will help his or her client exempt as much property as possible in his or her bankruptcy process. Although there are limits to what can be achieved, Chapter 7 filers may be surprised by how much of their property they are permitted to keep.

Source: FindLaw, "Bankruptcy Exemptions: Chapter 7," accessed June 10, 2016

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