Declaring yourself bankrupt is a life changing event for anyone. One needs to ask oneself whether he will be able to pay off his debts through some other means or would require to file bankruptcy to pay off the outstanding debt. Many people are often under the doubt on whether to file bankruptcy or not, what to lose or gain out of the proceedings and the personal bankruptcy exemptions applicable in ones state. These exemptions will enable a person to retain a part of his assets while filing chapter 7 bankruptcy which requires the person to entrust all his non-exempt assets to a chapter 7 bankruptcy trustee who will liquidate the assets and pay off the amount to the creditors. Cases of exemption and non-exemption happens only when a person files bankruptcy under chapter 7 and the bankruptcy court orders liquidation of all his assets that are exempt from the states bankruptcy law to pay off the creditors. Personal bankruptcy exemptions can be of two types. First being debts which have to be paid and second is assets which you will be allowed to retain.
Many times individuals look towards bankruptcy to save themselves from the clutches of debt but what they do not know is that there are certain types of debt which have to be paid off irrespective of whether the bankruptcy court discharges all the debts as a part of the bankruptcy proceedings. Such type of debts which cannot be discharged are money owed as taxes, child support payments, alimony and school loans. In-depth knowledge about the debt which is exempt from bankruptcy can be obtained by going through personal bankruptcy information and gaining an idea about the Federal bankruptcy rules and regulations as well as conditions of filing bankruptcy under chapter 7 or chapter 13 bankruptcy laws.
Assets that can be saved or retained by you while going through Federal bankruptcy proceedings and when the bankruptcy court orders liquidation of assets to pay off creditors can be your home, car, furniture, household items, clothes, pension fund, insurance, jewelry and certain other tools. However, the items which have been exempted from bankruptcy differ from one state to another and an individual cannot file bankruptcy from another state just to save his belongings or assets. Personal bankruptcy information provides detailed information on these exemptions especially on your primary residence whose value can vary from one state to another.
State bankruptcy exemptions allows an individual to retain certain assets and so does federal bankruptcy exemptions. However, it is up to you to decide which one works in your favor and this can be decided by comparing the asset value of different assets. But an individual can either file for state exemptions or federal bankruptcy exemptions but cannot choose both together. Filing personal bankruptcy jointly with your spouse or alone also depends on whether it is feasible for you or not and will depend on the asset value. Asset values change but exemption values do not and so it is advisable to wait long enough to let the asset value drop to the limit of exemption value.
Filing bankruptcy under chapter 7 or chapter 13 bankruptcy laws should be undertaken after gathering necessary and relevant personal bankruptcy information including details on federal bankruptcy exemptions and state bankruptcy exemptions.
Peter Ruckson is a regular writer on bsankruptcyonly.com, a US bredit657inased portal, which provides detailed
on Federal bankruptcy, and other Personal bankruptcy information related issues.