The Bankruptcy Alphabet: “E” is for “Exemptions”
May 11, 2012
A question I am often asked is, “will they sell everything I own if I file for bankruptcy?” The answer to this question is “No”. Under both State and Federal law there are allowances for property you can keep. Those allowances are called “Exemptions”.
For the vast majority of my clients, those exemptions are more than sufficient to protect everything a client owns. The whole concept behind filing for bankruptcy is to give someone a fresh start. If they took everything you have, you wouldn’t have anything left to help you get a fresh start.
There are even strategies to help clients keep items that are worth more than the exemptions allow. Those strategies are best chosen before the case is filed. This is why it is very important to have an accurate inventory of your property before the case is filed. Once the case is filed, there are fewer strategies available to address excess assets.