Understanding Bankruptcy Exemptions

Numerous research studies have discovered that financial problems factor prominently in the list of causes cited as the reason that married couples choose to seek a divorce. It should be no surprise then that when a small business owner or other individual faces the prospect of financial insolvency he or she is fraught with anxiety. The stress of the situation can take a serious toll on one’s physical and emotional health, as well as interpersonal relationships. Filing for bankruptcy protection offers one form of possible relief, and for many who are wracked by excessive debt loads it is the best choice.

However, there is a commonly held belief that filing for bankruptcy requires someone to surrender most or all of the assets in his or her possession. This is untrue in most cases for several different reasons, notably including the statutory assignment of bankruptcy exemptions. To learn more about what property of yours may or may not be subject to sale or seizure if you file for bankruptcy, contact the Arizona bankruptcy lawyers of the Harmon Law Office, L.L.C., at 480-829-0494.

What Are Bankruptcy Exemptions?

Chapter 7 Bankruptcy, also frequently called “liquidation” bankruptcy, is that which is most likely to result in the court ordered sale of assets. The provisions of Chapter 7 attempt to satisfy creditors by compelling the sale of a debtor’s property and dividing and distributing the proceeds from that sale. Recognizing that a debtor will continue to have certain basic personal and professional needs, however, there are certain kinds and amounts of assets that are considered exempt. Some important things to note:

• Many Chapter 7 filers do not have to surrender any of their property
• General exemptions allow debtors to claim and keep whatever property they wish, up to a certain assessed value
• There are other specific assets that are not exposed to sale, including professional tools, clothes, etc. under a maximum dollar value

Contact Us

Making the decision to file for bankruptcy can be difficult. Without a proper understanding of the benefits and potential drawbacks, it can be nearly impossible to identify the best course of action. To learn more, contact the Arizona bankruptcy lawyers of the Harmon Law Office, L.L.C., at 480-829-0494.