discharged, but before they are, your creditors can liquidate your assets to recoup some of the lost debt. This process of liquidation may mean losing your home, your vehicle, personal property from jewelry to boats, and even your burial plot. In Chapter 7 bankruptcy, then, bankruptcy exemptions are especially important. In a Chapter thirteen, or “reorganization” bankruptcy”, exemptions square measure still vital because the court calculates your debt compensation set up.
All states allow debtors to exempt certain property from being liquidated. In a handful of states, debtors have the option to choose federal bankruptcy exemptions or state bankruptcy exemptions. Most states, however, have opted out of the federal bankruptcy exemptions and debtors can only choose one of the state bankruptcy exemptions. California falls into this latter category. Because choosing the most beneficial bankruptcy exemption for your circumstances is quite a complicated process, it’s a very good idea to enlist the help of a California bankruptcy attorney.
To save as much assets as possible during bankruptcy, help and guidance from a California bankruptcy attorney is crucial. Choose a knowledgeable and experienced attorney who you can trust.
What is an Exemption?
In layman’s terms, a bankruptcy exemption allows a debtor to keep certain property. The exemption is applied to the equity on the property. “Equity”, if you’re not conversant in that term, refers to the number of cash you’ve got place into Associate in Nursing plus. For example, if you own a home valued at $500,000 and you still owe $450,000 to the bank, the equity of your home is $50,000.
All statutes provide a limit to the exemption. For example, if you only owe $350,000 on that $450,000 loan from the bank but the exemption limit is $50,000, the other $50,000 of your home’s equity can still be seized by you creditors.
California Bankruptcy Exemptions 2010
The first thing a bankruptcy lawyer in California will tell you is that the already complex bankruptcy exemption statutes were changed in 2010. However, the updated California bankruptcy exemptions 2010 are good news for most debtors, because they raise the exemption limit. In particular the “homestead exemption” limit has been raised from $50,000 to $75,000. In some cases, the California bankruptcy exemptions 2010 can go as high as $100,000 when applied to a homestead.
If you are filing for bankruptcy in the state of California and you’re trying to save your home, your vehicle, or another asset from seizure by your creditors or court Trustee, you should definitely consult with a California bankruptcy lawyer first. The California bankruptcy exemptions 2010 remain as complicated as they ever were – for example, even though California has officially opted out of the federal exemption system, some federal exemptions may still apply in a case-to-case basis. A bankruptcy attorney in California can help you determine exactly which exemption system – the 703 or 704 statutes – you should choose for your bankruptcy case.