Chapter 7 bankruptcy, also known as liquidation bankruptcy, permits a debtor to sell of items of property in order to satisfy their outstanding obligations to their creditors. Some Tyler residents may be wary of this process as it may seem as though they will be left with nothing once their financial obligations are fulfilled. However, through the permissible use of property exemptions a debtor may protect certain items of property for their lives after they have received their Chapter 7 discharges.
There are limits on what property may be exempt under the Chapter 7 bankruptcy rules. A debtor that owns two homes, such as a primary residence and a vacation property, may not be able to retain both properties throughout bankruptcy process. Additionally, a person who owns expensive items of personal property, such as artwork, heirlooms and jewelry collections may not be allowed to retain those items if they want to fulfill their debts to the creditors.
Generally, though, debtors can exempt their homes if those properties' values fall within the statutorily set limits of Chapter 7 bankruptcy's property exemptions. Additionally, debtors can often keep their cars, home appliances and other necessities to ensure that they do not become destitute after completing their Chapter 7 discharge.
It is important that readers of this bankruptcy legal blog understand that their personal debt situations may be very different from those of other readers. To this end, this post and the others contained on this legal blog may not be read as legal advice. Individuals who need bankruptcy help are asked to discuss their concerns with their trusted bankruptcy legal professionals.